Tri Pointe Homes, Inc. · NYSE:TPH
Tri Pointe Homes — TRI Pointe Group — Q1 2019 Earnings Presentation
34 slides from Tri Pointe Homes's earnings presentation, Apr 25, 2019
Slide 1: 2019 First Quarter Results
2019 First Quarter Results MaracayTM – Pardee Homes® – Quadrant Homes® – Trendmaker® Homes – TRI Pointe Homes® – Winchester® Homes
Slide 2: Forward Looking Statements
Forward Looking Statements 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, but are not limite
Slide 3: Management Team
Management Team Thomas Mitchell Douglas Bauer Michael Grubbs President & COO Chief Executive Officer Chief Financial Officer • Over 30 years of real estate • Over 30 years of real estate • Over 30 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 Market: Seattle Metro Area LTM Orders: 228 LTM Deliveries: 320 LTM HS Revenue: $287,180 LTM ASP: $897 Lots Owned or Controlled: 1,548 Markets: Los Angeles, Inland Empire, San Diego, Las Vegas LTM Orders: 1,535 LTM Deliveries: 1,550 LTM HS Revenue: $954,102 LTM ASP:
Slide 5: 2019 First Quarter Highlights
2019 First Quarter Highlights
Slide 6: 2019 First Quarter Highlights
2019 First Quarter Highlights Metric 1Q19 1Q18 % Change • Absorption rate of 3.0 new home orders per community per month Orders 1,321 1,496 -12% • New home deliveries down 12% to 814 with an Deliveries 814 924 -12% average sales price of $605,000 ASP of Home Deliveries ($mm) $605 $630 -4% • Backlog
Slide 7: Active Selling Communities and Absorption Rate
Active Selling Communities and Absorption Rate Q1 2019 Results Active Selling Communities and Absorption Rate Active Selling Communities by State As of and for the quarters ended March 31, 2018 and 2019 As of March 31, 2019 150 146 4.0 Washington 3.8 Arizona 131 Virginia 5% 3.5 9% 125 3% 3.0 3.0 100
Slide 8: New Home Orders – Q1 2019 Results
New Home Orders – Q1 2019 Results New Home Orders New Home Orders by State For the quarters ended March 31, 2018 and 2019 For the quarter ended March 31, 2019 1,600 Washington 1,496 Arizona Virginia 6% 2% 12% 1,400 1,321 1,200 Texas 19% 1,000 800 Decrease 12% YOY Colorado 600 6% California 39% 400 N
Slide 9: Backlog – Units and Dollar Value – Q1 2019 Results
Backlog – Units and Dollar Value – Q1 2019 Results Backlog – Units and Dollar Value Backlog Dollar Value by State As of March 31, 2018 and 2019 (dollars in thousands) As of March 31, 2019 2,143 2,200 Washington $1,600,000 Arizona 2,000 Virginia 6% 1,842 $1,409,042 11% $1,400,000 4% 1,800 $1,237,838
Slide 10: New Home Deliveries – Q1 2019 Results
New Home Deliveries – Q1 2019 Results New Home Deliveries New Home Deliveries by State As of and for the quarters ended March 31, 2018 and 2019 For the quarter ended March 31, 2019 1,000 Washington Arizona 924 Virginia 5% 9% 900 814 3% 800 700 Texas 19% 600 500 Decrease 12% YOY 400 300 Colorado 200
Slide 11: Home Sales Revenue – Q1 2019 Results
Home Sales Revenue – Q1 2019 Results Home Sales Revenue Home Sales Revenue by State For the quarters ended March 31, 2018 and 2019 (dollars in thousands) For the quarter ended March 31, 2019 $600,000 $582,572 Washington Arizona $500,000 $492,703 9% 8% Virginia 3% $400,000 Texas 14% $300,000 Decrease
Slide 12: SG&A Expenses, Income before Taxes and Net Income – Q1 2019 Results
SG&A Expenses, Income before Taxes and Net Income – Q1 2019 Results Selling, General and Administrative Expenses Income before Taxes, Net Income available to For the quarters ended March 31, 2018 and 2019 (dollars in thousands) Common Stockholders and EPS (Diluted) For the quarters ended March 31, 2
Slide 13: Orders, Deliveries and Absorption Rate by Segment
Orders, Deliveries and Absorption Rate year over year comparisons for the First Quarter 2019 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 March 31, 2018 and 2019 For the quarters ended March 31, 2018 and 2019 180 5.0 140 6.0 161 153 4.5 4.5 5.1 160 120 5.0 4.0 108 140 3.9 125 100 3.5 120 4.0 83 3.0 75 3.5 100 80 2.5 3.0 80 74 60 2.0 60
Slide 15: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended March 31, 2018 and 2019 For the quarters ended March 31, 2018 and 2019 250 243 2.5 160 4.0 148 2.1 140 3.7 3.5 200 2.0 120 114 3.0 1.7 155 154 2.7 150 1.5 100 2.5 89 80 2.0 100 1.0 58 Increase 57% YO
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 March 31, 2018 and 2019 For the quarters ended March 31, 2018 and 2019 350 6.0 250 5.0 303 4.6 5.0 4.5 300 5.0 202 271 200 4.0 250 3.5 4.0 3.2 191 150 3.0 200 3.3 130 158 3.0 2.5 15
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 March 31, 2018 and 2019 For the quarters ended March 31, 2018 and 2019 400 5.0 120 5.0 4.9 357 102 4.5 350 4.5 4.4 100 4.0 4.0 3.9 300 3.5 81 3.5 80 250 72 3.0 3.0 209 214 3.0 60
Slide 18: 2015–2018 Historical Results with 2019 Guidance Ranges
2015–2018 Historical Results with 2019 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, 2015 through 2018 and 2019 projections For the year ended December 31, 2018 150 146 4.0 Washington Arizona 127 130 Virginia
Slide 20: New Home Deliveries
New Home Deliveries New Home Deliveries New Home Deliveries by State For the quarters ended March 31, 2015 through 2018 and 2019 projections For the year ended December 31, 2018 Guidance 6,000 Range of Deliveries Washington Arizona Virginia 7% 11% 5,000 5,000 5,071 3% 4,600 4,697 Texas Decrease 5% Y
Slide 21: Home Sales Revenue
Home Sales Revenue Home Sales Revenue Home Sales Revenue by State For the years ended December 31, 2015 through 2018 and 2019 projections For the year ended December 31, 2018 (dollars in millions) Guidance Range of Home Sales $3,500 Revenue $3,244 $3,100 $3,000 Washington Arizona Virginia 9% 8% $2,7
Slide 22: SG&A Expenses, Income before Taxes and Net Income
SG&A Expenses, Income before Taxes and Net Income Selling, General and Administrative Expenses Income before Taxes, Net Income available to For the years ended December 31, 2015 through 2018 (dollars in thousands) Common Stockholders and EPS (Diluted) For the full years ended December 31, 2015 throu
Slide 23: 2019 Second Quarter and Full Year Outlook
2019 Second Quarter and Full Year Outlook
Slide 24: Second Quarter 2019 Outlook
Second Quarter 2019 Outlook Second Quarter 2019 Outlook • Expect to open 10 new communities and close out of 13, resulting in 143 active selling communities as of June 30, 2019 • Anticipate delivering 53% to 58% of the 1,842 homes in backlog as of March 31, 2019 at an average sales price of $610,000
Slide 25: Full Year 2019 Outlook
Full Year 2019 Outlook Full Year 2019 Outlook • Anticipate delivering between 4,600 and 5,000 homes at an average sales price in a range of $610,000 to $620,000 • Anticipate homebuilding gross margin for the full year to be in a range of 19% to 20% • Anticipate SG&A expense ratio for the full year t
Slide 26: Land Supply, Orders by Month, Debt
Land Supply Orders by Month Debt
Slide 27: Significant Land Supply to Fuel Growth
Significant Land Supply to Fuel Growth Combined Lot Position As of March 31, 2019 Note: Dollars in thousands Implied years Market Owned Controlled (1) Total Lots % Owned Inventory Dollars LTM Deliveries of Supply (2) California 14,057 833 14,890 94% $1,672,726 2,145 6.9 Colorado 688 94 782 88% $114,
Slide 28: New Home Orders – Historical by Month
New Home Orders – Historical by Month 1Q19 Orders down 12% YOY Full Year Absorption Rate: 2018 – 3.00 per month 600 2017 – 3.32 per month 571 556 2016 – 2.99 per month 550 524 511 500 477 468 477 477 2016 459 449 445 444 435 431 437 450 418 425 2017 409 397 400 400 377 375 364 2018 356 348 346 345 3
Slide 29: Selected Balance Sheet Metrics
Selected Balance Sheet Metrics Selected Balance Sheet Metrics $ in thousands 3/31/2019 12/31/2018 • During the quarter, the Company Cash and cash equivalents $ 148,782 $ 277,696 executed a new $250 million term Real estate inventories $ 3,242,678 $ 3,216,059 loan facility and extended the Total Debt
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 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
Slide 33: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d)(unaudited) The following tables contain information about our operating results reflecting certain adjustments to income before income taxes, (provision) benefit for income taxes, net income , net income available to common stockholders and earn
Slide 34: Reconciliation of Non-GAAP Financial Measures (cont'd)
Reconciliation of Non-GAAP Financial Measures (cont’d)(unaudited) The following tables contain information about our operating results reflecting certain adjustments to income before income taxes, (provision) benefit for income taxes, net income, net income available to common stockholders and earni