Tri Pointe Homes, Inc. · NYSE:TPH
Tri Pointe Homes — Tri Pointe Group — Q2 2017 Earnings Presentation
33 slides from Tri Pointe Homes's earnings presentation, Jul 26, 2017
Slide 1: 2017 Second Quarter Results
2017 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 • 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: 343 LTM Deliveries: 313 LTM HS Revenue: $186,421 LTM ASP: $596 Lots Owned or Controlled: 1,852 Markets: Los Angeles, Inland Empire, San Diego, Las Vegas LTM Orders: 1,414 LTM Deliveries: 1,262
Slide 5: 2017 Second Quarter Highlights
2017 Second Quarter Highlights
Slide 6: 2017 Second Quarter Highlights
2017 Second Quarter Highlights • Absorption rate of 3.8 new home orders per Metric 2Q17 2Q16 % Change community per month Orders 1,445 1,258 15% • New home deliveries up 8% to 1,071 with an Deliveries 1,071 994 8% average sales price of $531K • Home sales revenue up 2% to $569MM ASP of Home Deliveri
Slide 7: Active Selling Communities and Absorption Rate Q2 2017 Results
Active Selling Communities and Absorption Rate Q2 2017 Results Active Selling Communities and Absorption Rate Active Selling Communities by State As of and for the quarters ended June 30, 2016 and 2017 As of June 30, 2017 140 4.0 131 3.8 Washington Arizona 117 Virginia 6% 120 3.5 3.5 11% 2% 3.0 100
Slide 8: New Home Orders – Q2 2017 Results
New Home Orders – Q2 2017 Results New Home Orders New Home Orders by State For the quarters ended June 30, 2016 and 2017 For the quarter ended June 30, 2017 1,600 Washington Arizona 1,445 Virginia 7% 11% 1,400 2% 1,258 Texas 1,200 9% Colorado 1,000 4% 800 Nevada Increase 15% YOY 600 11% 400 Californ
Slide 9: Backlog – Units and Dollar Value – Q2 2017 Results
Backlog – Units and Dollar Value – Q2 2017 Results Backlog – Units and Dollar Value Backlog Dollar Value by State As of June 30, 2016 and 2017 (dollars in thousands) As of June 30, 2017 2,200 2,108 $1,339,217 $1,400,000 Washington Arizona 2,000 11% 12% 1,798 Virginia 1,800 $1,200,000 2016 3% 1,600 $
Slide 10: New Home Deliveries – Q2 2017 Results
New Home Deliveries – Q2 2017 Results New Home Deliveries New Home Deliveries by State As of and for the quarters ended June 30, 2016 and 2017 For the quarter ended June 30, 2017 1,200 Washington 1,071 Virginia 6% Arizona 994 2% 15% 1,000 Texas 12% 800 Colorado 600 4% Increase 8% YOY 400 Nevada 13%
Slide 11: Home Sales Revenue – Q2 2017 Results
Home Sales Revenue – Q2 2017 Results Home Sales Revenue Home Sales Revenue by State For the quarters ended June 30, 2016 and 2017 (dollars in thousands) For the quarter ended June 30, 2017 $600,000 $556,925 $568,816 Washington 7% Arizona $500,000 Virginia 13% 3% Texas $400,000 12% $300,000 Colorado
Slide 12: SG&A Expenses, Income before Taxes and Net Income – Q2 2017 Results
SG&A Expenses, Income before Taxes and Net Income – Q2 2017 Results Selling General and Administrative Expenses Income before Taxes, Net Income available to For the quarters ended June 30, 2016 and 2017 (dollars in thousands) Common Stockholders and EPS (Diluted) For the quarters ended June 30, 2016
Slide 13: Orders, Deliveries and Absorption Rate by Segment
Orders, Deliveries and Absorption Rate year over year comparisons for the Second 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 June 30, 2016 and 2017 For the quarters ended June 30, 2016 and 2017 250 4.0 140 6.0 3.4 5.3 3.4 3.5 120 191 107 5.0 200 105 3.0 162 164 100 92 4.0 150 2.5 80 3.4 120 3.0 2.0 64 60 Decrease 15% YOY 1
Slide 15: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended June 30, 2016 and 2017 For the quarters ended June 30, 2016 and 2017 180 5.0 160 2.0 160 151 4.5 140 133 129 133 4.2 126 4.0 1.6 140 120 1.5 123 3.5 120 1.4 108 3.0 100 3.0 95 100 2.5 80 1.0 80 Decre
Slide 16: Orders, Deliveries and Absorption Rate – California, Nevada
California Nevada Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended June 30, 2016 and 2017 For the quarters ended June 30, 2016 and 2017 400 7.0 180 5.0 156 4.6 350 6.2 160 4.5 6.1 327 6.0 139 140 140 4.0 300 4.1 5.0 118 3.5 120 250 232 3.0 201 200
Slide 17: Orders, Deliveries and Absorption Rate – California, Colorado
California Colorado Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended June 30, 2016 and 2017 For the quarters ended June 30, 2016 and 2017 400 5.0 60 3.0 4.9 362 4.8 346 4.5 50 51 2.6 350 50 2.5 4.0 2.3 300 3.5 40 2.0 37 250 3.0 33 206 200 2.5 30 1.
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 Adjusted FY average due to increased absorption
Slide 20: 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 21: 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 8% 1,193 Arizona 1,156 Virginia 21% 1,032 2% 1,000 Texas 14% Increase 12% YOY Colorado Increase 3% YOY 500 5% Nevada 8
Slide 22: 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 4,800 Deliveries Washington Arizona 4,600 9% 15% Virginia 4,000
Slide 23: 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 $2,736 Revenue Washington Arizona
Slide 24: 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 25: 2017 Outlook
2017 Outlook & 2 ie a Jas MN ‘Diese \ > I | | Lie } | | ' a4 A 1; = | 4 at Ls | x — ee OO
Slide 26: Third Quarter and Full Year 2017 Outlook
Third Quarter and Full Year 2017 Outlook Third Quarter • Expect to open 10 new communities and close out of 19, resulting in 122 active selling communities as of September 30, 2017 • Anticipate delivering approximately 50% to 55% of the 2,108 homes in backlog as of June 30, 2017 at an average sales
Slide 27: Land Supply, Orders by Month, Debt
Land Supply Orders by Month Debt
Slide 28: Significant Land Supply to Fuel Growth
Significant Land Supply to Fuel Growth Combined Lot Position As of June 30, 2017 . Note: Dollars in thousands Implied Years Market Owned Controlled Total Lots % Owned Inventory Dollars LTM Deliveries of Supply (1) California 16,324 344 16,668 98% $1,773,183 1,745 9.6 Colorado 618 229 847 73% $112,22
Slide 29: New Home Orders – Historical by Month
New Home Orders – Historical by Month 2Q17 Orders up 1Q17 15% YOY Orders up 13% YOY 4Q16 550 524 2015 Orders up 2016 21% YOY 500 477 477 477 455 457 2017 445 444 450 418 425 415409 410 400 377 371 367 356 355 346 345 350 324 322 318 306 297 300 280 274 267 250 227 208 200 150 100 50 0 Jan Feb Mar Ap
Slide 30: Selected Balance Sheet Metrics
Selected Balance Sheet Metrics Selected Balance Sheet Metrics • During the quarter, the Company $ in thousands 6/30/2017 12/31/2016 successfully issued $300 million Cash and cash equivalents $ 114,945 $ 208,657 aggregate principal amount of Real estate inventories $ 3,208,341 $ 2,910,627 5.25% Senio
Slide 31: Supplemental Data and Reconciliation
Supplemental Data and Reconciliation
Slide 32: 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 33: 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