Tri Pointe Homes, Inc. · NYSE:TPH
Tri Pointe Homes — TRI Pointe Group — Q4 2018 Earnings Presentation
40 slides from Tri Pointe Homes's earnings presentation, Feb 26, 2019
Slide 1: 2018 Fourth Quarter and Full Year Results
2018 Fourth Quarter and Full Year Results Maracay™ – 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, but are not limited
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 2018 Orders: 261 2018 Deliveries: 359 2018 HS Revenue: $305,213 2018 ASP: $850 Lots Owned or Controlled: 1,744 Markets: Los Angeles, Inland Empire, San Diego, Las Vegas 2018 Orders: 1,575 2018 Deliveries: 1,582 2018 HS Revenue: $999,710 20
Slide 5: 2018 Fourth Quarter and Full Year Highlights
2018 Fourth Quarter and Full Year Highlights
Slide 6: 2018 Fourth Quarter Highlights
2018 Fourth Quarter Highlights • Absorption rate of 2.1 new home orders per Metric 4Q18 4Q17 % Change community per month Orders 812 1,063 -24% • New home deliveries down 2% to 1,727 with Deliveries 1,727 1,757 -2% an average sales price of $649,000 ASP of Home Deliveries ($000's) $649 $639 2% • Bac
Slide 7: 2018 Full Year Highlights
2018 Full Year Highlights • Absorption rate of 3.0 new home orders per Metric 2018 2017 % Change community per month Orders 4,686 5,075 -8% • New home deliveries up 8% to 5,071 with an Deliveries 5,071 4,697 8% average sales price of $640,000 ASP of Home Deliveries ($000s) $640 $582 10% • Home sales
Slide 8: Active Selling Communities and Absorption Rate
Active Selling Communities and Absorption Rate Q4 2018 Results Active Selling Communities and Absorption Rate Active Selling Communities by State As of and for the quarters ended December 31, 2017 and 2018 As of December 31, 2018 150 146 4.0 Washington 130 Virginia 5% Arizona 3.5 7% 125 3% 3.0 2.8 1
Slide 9: New Home Orders – Q4 2018 Results
New Home Orders – Q4 2018 Results New Home Orders New Home Orders by State For the quarters ended December 31, 2017 and 2018 For the quarter ended December 31, 2018 1,200 Washington Virginia 4% Arizona 1,063 3% 11% 1,000 Texas 812 18% 800 600 Colorado Decrease 24% YOY 5% 400 California Nevada 44% 7%
Slide 10: Backlog – Units and Dollar Value – Q4 2018 Results
Backlog – Units and Dollar Value – Q4 2018 Results Backlog – Units and Dollar Value Backlog Dollar Value by State As of December 31, 2017 and 2018 (dollars in thousands) As of December 31, 2018 1,800 Washington $1,200,000 Arizona 1,571 Virginia 5% 1,600 10% $1,032,776 4% 1,335 2017 $1,000,000 1,400
Slide 11: New Home Deliveries – Q4 2018 Results
New Home Deliveries – Q4 2018 Results New Home Deliveries New Home Deliveries by State As of and for the quarters ended December 31, 2017 and 2018 For the quarter ended December 31, 2018 2,000 Washington Arizona 1,800 1,757 Virginia 7% 9% 1,727 3% 1,600 1,400 Texas 13% 1,200 1,000 Colorado Decrease
Slide 12: Home Sales Revenue – Q4 2018 Results
Home Sales Revenue – Q4 2018 Results Home Sales Revenue Home Sales Revenue by State For the quarters ended December 31, 2017 and 2018 (dollars in thousands) For the quarter ended December 31, 2018 $1,200,000 $1,122,841 $1,120,952 Washington Arizona $1,000,000 10% 7% Virginia 4% $800,000 Texas 10% $6
Slide 13: SG&A Expenses, Income before Taxes and Net Income – Q4 2018 Results
SG&A Expenses, Income before Taxes and Net Income – Q4 2018 Results Selling, General and Administrative Expenses Income before Taxes, Net Income available to For the quarters ended December 31, 2017 and 2018 (dollars in thousands) Common Stockholders and EPS (Diluted) For the quarters ended December
Slide 14: Orders, Deliveries and Absorption Rate by Segment
Orders, Deliveries and Absorption Rate year over year comparisons for the Fourth Quarter and Full Year 2018 by Segment (Includes breakout by state for Pardee Homes and TRI Pointe Homes brands)
Slide 15: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2017 and 2018 Year-to-date through December 31, 2017 and 2018 200 4.0 700 4.0 181 628 180 3.5 597 3.5 600 3.3 160 155 3.4 538 3.0 472 3.0 140 3.0 500 2.5 2.5 120 2.4 400 100 93 90 2.0 2.
Slide 16: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2017 and 2018 Year-to-date through December 31, 2017 and 2018 160 4.0 400 395 5.0 146 359 352 3.6 4.4 4.5 140 3.5 118 4.0 120 3.0 300 261 3.5 100 2.5 3.2 84 3.0 80 2.0 200 2.5 Decrease 3
Slide 17: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2017 and 2018 Year-to-date through December 31, 2017 and 2018 250 2.0 700 2.0 221 601 610 1.8 600 1.7 200 1.6 1.6 516 1.5 506 163 500 1.4 1.4 1.4 146 150 1.2 400 123 1.0 1.0 300 100 0.8
Slide 18: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2017 and 2018 Year-to-date through December 31, 2017 and 2018 250 3.0 600 4.0 2.7 512 495 3.5 202 2.5 500 467 466 200 3.2 3.0 169 2.0 400 2.8 150 2.0 2.5 117 1.5 300 2.0 100 Increase 10%
Slide 19: California Orders, Deliveries and Absorption Rate
California California Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2017 and 2018 Year-to-date through December 31, 2017 and 2018 400 4.0 1,100 6.0 366 370 1,078 3.7 1,080 350 3.5 1,060 5.1 5.0 300 3.0 1,040 2.8 3.9 4.0 250 222 2.5
Slide 20: Nevada Orders, Deliveries and Absorption Rate
Nevada Nevada Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2017 and 2018 Year-to-date through December 31, 2017 and 2018 250 3.0 700 4.0 2.6 584 584 3.5 207 600 3.4 2.5 200 3.3 502 3.0 169 500 479 2.0 150 2.5 400 1.5 2.0 105 1.4 30
Slide 21: California Orders, Deliveries and Absorption Rate
California California Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2017 and 2018 Year-to-date through December 31, 2017 and 2018 500 4.0 1,400 5.0 455 1,279 3.7 1,219 4.5 450 3.5 1,141 418 1,200 400 4.0 4.2 1,016 3.0 1,000 350 3.3
Slide 22: Colorado Orders, Deliveries and Absorption Rate
Colorado Colorado Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2017 and 2018 Year-to-date through December 31, 2017 and 2018 80 75 4.0 350 4.5 69 69 295 4.0 3.5 300 3.6 3.1 3.5 60 3.0 251 250 3.0 44 2.5 213 2.3 200 172 2.5 2.6 40 2
Slide 23: 2014 – 2018 Historical Results
2014 – 2018 Historical Results
Slide 24: 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 2018 For the year ended December 31, 2018 150 4.0 Washington Arizona 127 130 Virginia 5% 3.5 9% 125 116 118 4%
Slide 25: New Home Deliveries – FY 2014 through FY 2018
New Home Deliveries – FY 2014 through FY 2018 New Home Deliveries New Home Deliveries by State For the years ended December 31, 2014 through 2018 For the year ended December 31, 2018 6,000 Washington Arizona 5,071 Virginia 7% 11% 5,000 4,697 3% 4,211 4,057 Texas 4,000 12% 3,100 3,000 Colorado 5% 2,0
Slide 26: Home Sales Revenue – FY 2014 through FY 2018
Home Sales Revenue – FY 2014 through FY 2018 Home Sales Revenue Home Sales Revenue by State For the years ended December 31, 2014 through 2018 (dollars in millions) For the year ended December 31, 2018 $3,500 $3,244 $3,000 Washington Arizona $2,732 9% Virginia 8% $2,500 $2,329 3% $2,291 Texas $2,000
Slide 27: SG&A Expenses, Income before Taxes and Net Income – FY 2014 through FY 2018
SG&A Expenses, Income before Taxes and Net Income – FY 2014 through FY 2018 Selling, General and Administrative Expenses Income before Taxes, Net Income available to For the years ended December 31, 2014 through 2018 (dollars in thousands) Common Stockholders and EPS (Diluted) For the full years end
Slide 28: 2019 First Quarter and Full Year Outlook
2019 First Quarter and Full Year Outlook
Slide 29: First Quarter 2019 Outlook
First Quarter 2019 Outlook First Quarter 2019 Outlook • Expect to open 9 new communities and close out of 7, resulting in 148 active selling communities as of March 31, 2019 • Anticipate delivering 55% to 60% of the 1,335 homes in backlog as of December 31, 2018 at an average sales price of $600,000
Slide 30: 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 31: Land Supply, Orders by Month, Debt
Land Supply Orders by Month Debt
Slide 32: Significant Land Supply to Fuel Growth
Significant Land Supply to Fuel Growth Combined Lot Position As of December 31, 2018 . Note: Dollars in thousands Implied years Market Owned Controlled (1) Total Lots % Owned Inventory Dollars 2018 Deliveries of Supply (2) California 14,379 839 15,218 94% $1,679,668 2,217 6.9 Colorado 760 106 866 88
Slide 33: New Home Orders – Historical by Month
New Home Orders – Historical by Month Full Year Absorption Rate: 2018 – 3.00 per month February 2017 – 3.32 per month 4Q18 600 Orders 571 2016 – 2.99 per month Orders through down 2/24/19 24% YOY 550 524 511 500 477 468 477 477 2016 459 445 444 435 431 437 450 418 425 2017 409 397 400 400 385 377 37
Slide 34: Selected Balance Sheet Metrics
Selected Balance Sheet Metrics Selected Balance Sheet Metrics $ in thousands 12/31/2018 12/31/2017 • During the quarter, the Company Cash and cash equivalents $ 277,696 $ 282,914 paid down its unsecured revolving Real estate inventories $ 3,216,059 $ 3,105,553 credit facility to $0. Total Debt $ 1,4
Slide 35: Supplemental Data and Reconciliation
Supplemental Data and Reconciliation
Slide 36: 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 37: 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 38: 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 39: 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 40: 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