Tri Pointe Homes, Inc. · NYSE:TPH
Tri Pointe Homes — TRI Pointe Group — Q4 2015 Earnings Presentation
38 slides from Tri Pointe Homes's earnings presentation, Feb 26, 2016
Slide 1: 2015 Fourth Quarter and Full Year Results
2015 Fourth Quarter and Full Year 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 25 years of real estate • Over 25 years of real estate • Over 25 years of real estate and homebuilding and homebuilding experience and homebuilding experience • Former
Slide 4: A Family of Regional Homebuilders
A Family of Regional Homebuilders A Family of Regional Homebuilders Market: Greater Puget Sound Area 2015 Orders: 441 2015 Deliveries: 411 2015 HS Revenue: $180,772 2015 ASP: $440 Lots Owned or Controlled: 1,274 3-Year Goal: 400 Deliveries Markets: Los Angeles/Ventura, Inland Empire, San Diego, Las
Slide 5: 2015 Fourth Quarter Highlights
2015 Fourth Quarter Highlights
Slide 6: 2015 Fourth Quarter Highlights
2015 Fourth Quarter Highlights FOURTH QUARTER HIGHLIGHTS AND COMPARISONS TO FOURTH QUARTER 2014 • New home orders increased 5% to 753 • New home deliveries up 30% to 1,453 with increased average sales price to $583K • Home sales revenue up 36% to $847.4M • Homebuilding gross margin of 22.2% • Adjust
Slide 7: Active Selling Communities and Absorption Rate
Active Selling Communities and Absorption Rate Active Selling Communities and Absorption Rate Communities by State As of and for the quarters ended December 31, 2014 and 2015 As of December 31, 2015 120 3.0 Washington 108 104 Arizona 10% 13% 100 2.5 Virginia 2.25 2.23 7% 80 2.0 Decrease 4% YOY 60 1.
Slide 8: New Home Orders – Fourth Quarter Results
New Home Orders – Fourth Quarter Results Fourth Quarter - New Home Orders Orders by State For the quarters ended December 31, 2014 and 2015 For the quarter ended December 31, 2015 1,000 Washington Arizona 12% 11% 900 Virginia 800 753 5% 714 700 Texas 600 10% 500 Increase 5% YOY Colorado 400 3% Calif
Slide 9: New Home Deliveries – Fourth Quarter Results
New Home Deliveries – Fourth Quarter Results Fourth Quarter – New Home Deliveries Deliveries by State As of and for the quarters ended December 31, 2014 and 2015 For the quarter ended December 31, 2015 1,600 Washington 1,453 Arizona 8% 12% 1,400 Virginia 5% 1,200 1,122 Texas 1,000 10% Increase 30% Y
Slide 10: Backlog – Units and Dollar Value
Backlog – Units and Dollar Value (“GAAP”) Backlog – Units and Dollar Value Dollar Value by State As of December 31, 2014 and 2015 (dollars in thousands) As of December 31, 2015 1,400 Washington $1,200,000 Arizona 10% 12% 1,200 1,156 Virginia 1,032 2014 $1,000,000 4% 1,000 2015 $800,000 Texas $697,33
Slide 11: Home Sales Revenue – Fourth Quarter Results
Home Sales Revenue – Fourth Quarter Results Fourth Quarter – Home Sales Revenue Home Sales Revenue by State For the quarters ended December 31, 2014 and 2015 (dollars in thousands) For the quarter ended December 31, 2015 $1,000,000 Washington $900,000 Arizona $847,409 6% Virginia 8% $800,000 7% $700
Slide 12: 2015 Full Year Highlights
2015 Full Year Highlights
Slide 13: 2015 Full Year Highlights
2015 Full Year Highlights FULL YEAR HIGHLIGHTS AND COMPARISONS TO FULL YEAR 2014 • New home orders increased 42% to 4,181 • New home deliveries up 31% to 4,057 with increased average sales price to $565K • Home sales revenue up 39% to $2.3 billion • Homebuilding gross margin of 21.1% • Adjusted home
Slide 14: 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, 2014 and 2015 – on an adjusted basis (1) For the year ended December 31, 2015 4,500 Washington 4,181 4,181 Arizona 10% 4,000 14% Virginia 3,500 4% 3,283 2,947 3,000 Texas Increase 42% YOY
Slide 15: 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, 2014 and 2015 – on an adjusted basis (1) For the year ended December 31, 2015 4,500 Washington Arizona 4,057 4,057 4,000 10% 12% Virginia 3,500 3,297 6% 3,100 3,000 Increase 2
Slide 16: 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, 2014 and 2015 – on an adjusted basis (1) For the year ended December 31, 2015 (dollars in thousands) $2,500,000 $2,291,264 $2,291,264 Washington Arizona 8% 8% $2,000,000
Slide 17: Land and Lot Sales Revenue – Full Year Results
Land and Lot Sales Revenue – Full Year Results Land and Lot Sales Revenue and Gross Profit Land and Lot Sales Revenue by State For the years ended December 31, 2014 and 2015 For the year ended December 31, 2015 (dollars in thousands) $125,000 $101,284 $100,000 Maryland 32% $75,000 Revenue $66,196 Gr
Slide 18: Orders, Deliveries and Absorption Rate by Segment
Orders, Deliveries and Absorption Rate year over year comparisons for the Fourth Quarter and Full Year 2015 by Segment (Includes breakout by state for Pardee Homes and TRI Pointe Homes brands)
Slide 19: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2014 and 2015 For the years ended December 31, 2014 and 2015 200 3.0 700 4.0 180 173 600 578 3.5 2.5 160 480 3.0 140 500 1.8 2.0 2.9 120 110 385 396 2.5 400 100 1.5 2.0 83 2.0 72 1.5 300
Slide 20: Nevada
Nevada Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2014 and 2015 For the years ended December 31, 2014 and 2015 160 4.0 450 4.0 394 140 136 3.5 400 3.5 374 3.0 3.2 120 2.9 3.0 350 112 3.0 94 300 276 280 100 2.5 2.5 250 80 2.0 2.0
Slide 21: California
California Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2014 and 2015 For the years ended December 31, 2014 and 2015 300 5.0 800 792 6.0 262 270 4.5 780 5.2 250 4.6 5.0 3.7 4.0 756 760 752 3.5 3.5 200 4.0 740 3.0 150 138 2.5 720 3.
Slide 22: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2014 and 2015 For the years ended December 31, 2014 and 2015 120 114 4.0 500 4.0 441 3.4 101 450 3.5 3.5 411 100 88 400 3.0 337 3.0 2.8 350 80 320 2.5 300 2.5 2.3 60 2.0 250 2.0 51 Incre
Slide 23: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2014 and 2015 For the years ended December 31, 2014 and 2015 200 2.5 600 557 561 2.5 539 180 157 500 160 2.0 457 2.0 145 140 1.9 121 1.6 400 120 1.5 1.5 1.5 100 300 76 1.1 Decrease 18% Y
Slide 24: Colorado
Colorado Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2014 and 2015 on an adjusted basis(1) For the years ended December 31, 2014 and 2015 on an adjusted basis(1) 70 4.0 65 250 4.0 60 3.2 3.5 55 3.5 3.2 193 193 3.0 200 50 3.0 2.5 4
Slide 25: California
California Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2014 and 2015 on an adjusted basis(1) For the years ended December 31, 2014 and 2015 on an adjusted basis(1) 450 4.0 1,000 4.0 914 3.7 400 384 867 3.2 3.5 3.5 350 800 3.0 3.3
Slide 26: Orders, Deliveries and Absorption Rate
Orders, Deliveries and Absorption Rate Orders, Deliveries and Absorption Rate For the quarters ended December 31, 2014 and 2015 For the years ended December 31, 2014 and 2015 180 3.0 500 3.0 166 2.6 450 437 160 412 2.5 387 2.5 2.5 134 2.5 400 140 339 350 120 2.0 2.0 102 300 100 86 1.6 1.5 250 1.5 80
Slide 27: 2016 Outlook
2016 Outlook
Slide 28: First Quarter 2016 Update and Outlook
First Quarter 2016 Update and Outlook • New home orders were flat for the month of January as compared to the Company results for the comparable month a year ago; however, absorption per month per average community increased slightly to 2.98 from 2.96 for the comparable month a year ago • Anticipate
Slide 29: Full Year 2016 Update and Outlook
Full Year 2016 Update and Outlook • Expect to grow active selling communities by 20% for the full year • Anticipate delivering between 4,200 and 4,400 homes at an average sales price of $550,000 • Anticipate generating between $45 and $50 million of gross profit from land and lot sales, most of whic
Slide 30: Significant Land Supply, Orders by Month, Debt
Significant Land Supply Orders by Month Debt
Slide 31: Significant Land Supply to Fuel Growth
Significant Land Supply to Fuel Growth Combined Lot Position As of December 31, 2015 Market Owned Controlled Total Lots % Owned Inventory Dollars LTM Deliveries Years of Supply California 16,904 623 17,527 96% $1,418,123 1,623 10.8 Colorado 375 501 876 43% $71,477 193 4.5 Washington, D.C. (1) 1,955
Slide 32: New Home Orders – Oct 2014 to Jan 2016
New Home Orders – Oct 2014 to Jan 2016 New Home Orders (October 2014 through January 2016) 500 455 457 450 415 410 400 371 367 355 350 324 322 318 300 274 249 252 250 227 213 208 200 150 100 50 0 Oct Nov Dec Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan 2014 2015 2016 2.38 2.42 2.00 2.96 3.67
Slide 33: Selected Balance Sheet Metrics
Selected Balance Sheet Metrics Selected Balance Sheet Metrics $ in thousands 12/31/2015 12/31/2014 Cash and cash equivalents $ 214,485 $ 170,629 • In December 2015, the Company Real estate inventories $ 2,519,273 $ 2,280,183 made a $50 million pay down on Debt $ 1,170,505 $ 1,138,493 its unsecured r
Slide 34: Supplemental Data and Reconciliation
Supplemental Data and Reconciliation
Slide 35: 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 36: Reconciliation of Non-GAAP Financial Measures (unaudited)
Reconciliation of Non-GAAP Financial Measures (unaudited) The following table reconciles homebuilding gross margin percentage, as reported and prepared in accordance with GAAP, to the non- GAAP measure adjusted homebuilding gross margin percentage. We believe this information is meaningful as it iso
Slide 37: 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 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-capital. We believe that the ratio of net debt- to-capital is a relevant financial measure for management and investors to understand th