-New Home Orders up 15% Year-Over-Year on
a 6% Increase in Average Selling
Communities- -Reports Net Income Available to
Common Stockholders of $32.7 Million, or $0.21 per Diluted
Share- -Home Sales Revenue of $568.8 Million
and Homebuilding Gross Margin Percentage of
20.1%- -Repurchased $99.2 Million of Common
Stock at a Weighted Average Price of
$12.43- -Issued $300 Million Aggregate
Principal Amount of 5.25% Senior Notes Due
2027- -Authorizes Additional $50 Million for
Share Repurchases-
TRI Pointe Group, Inc. (the "Company") (NYSE:TPH) today announced
results for the second quarter ended June 30, 2017. The
Company also announced that its Board of Directors has authorized
the repurchase of up to an additional $50 million of Company common
stock under its existing stock repurchase program (the “Repurchase
Program”), increasing the aggregate authorization from $100 million
to $150 million.
Results and Operational Data for Second
Quarter 2017 and Comparisons to Second Quarter 2016
- Net income available to common stockholders was $32.7 million,
or $0.21 per diluted share, compared to $73.9 million, or $0.46 per
diluted share
- 2016 included two land transactions representing $61.6 million
in land and lot sales revenue and $52.7 million in land and lot
gross margin, with no significant comparable transactions in the
current year
- New home orders of 1,445 compared to 1,258, an increase of
15%
- Active selling communities averaged 126.8 compared to 119.5, an
increase of 6%
- New home orders per average selling community were 11.4 orders
(3.8 monthly) compared to 10.5 orders (3.5 monthly)
- Cancellation rate of 15% compared to 13%, an increase of 200
basis points
- Backlog units at quarter end of 2,108 homes compared to 1,798,
an increase of 17%
- Dollar value of backlog at quarter end of $1.3 billion compared
to $1.0 billion, an increase of 31%
- Average sales price in backlog at quarter end of $635,000
compared to $571,000, an increase of 11%
- Home sales revenue of $568.8 million compared to $556.9
million, an increase of 2%
- New home deliveries of 1,071 homes compared to 994 homes, an
increase of 8%
- Average sales price of homes delivered of $531,000 compared to
$560,000, a decrease of 5%
- Homebuilding gross margin percentage of 20.1% compared to
22.3%, a decrease of 220 basis points
- Excluding interest, impairments and lot option abandonments,
adjusted homebuilding gross margin percentage was 22.5%*
- SG&A expense as a percentage of homes sales revenue of
11.6% compared to 11.3%, an increase of 30 basis points
- Ratios of debt-to-capital and net debt-to-net capital of 47.6%
and 45.8%*, respectively, as of June 30, 2017
- Successfully issued $300 million aggregate principal amount of
5.25% Senior Notes due 2027
- Extended existing unsecured revolving credit facility maturity
date by two years to May 18, 2021, while decreasing total
commitments from $625 million to $600 million
- Ended second quarter of 2017 with cash of $114.9 million and
$442.2 million of availability under the Company's unsecured
revolving credit facility
* See "Reconciliation of Non-GAAP Financial Measures"
“I am pleased to announce that TRI Pointe Group recorded another
quarter of strong operational and financial performance for the
second quarter of 2017, highlighted by a 15% increase in net new
home orders and net income of $32.7 million, or $0.21 per diluted
share,” said TRI Pointe Group Chief Executive Officer Doug
Bauer. “We met or exceeded our previously stated guidance for
backlog conversion, homebuilding gross margin and quarter-end
community count, and put ourselves in a great position to achieve
our goals for the back half of the year, thanks in part to a 31%
increase in the dollar value of our backlog. These results
are a testament to the overall health of the housing market, TRI
Pointe’s strong market positioning and our ongoing commitment to
operational excellence.”
Second Quarter 2017 Operating
Results
Net income available to common stockholders was $32.7 million,
or $0.21 per diluted share in the second quarter of 2017, compared
to net income available to common stockholders of $73.9 million, or
$0.46 per diluted share for the second quarter of
2016. The decrease in net income available to common
stockholders was primarily driven by two land transactions in the
second quarter of 2016 representing $61.6 million in land and lot
sales revenue and $52.7 million in land and lot gross margin, with
no comparable transactions in the current year period.
Home sales revenue increased $11.9 million, or 2%, to $568.8
million for the second quarter of 2017, as compared to $556.9
million for the second quarter of 2016. The increase was
primarily attributable to an 8% increase in new home deliveries to
1,071, offset by a 5% decrease in average selling price of homes
delivered to $531,000 compared to $560,000 in the second quarter of
2016.
New home orders increased 15% to 1,445 homes for the second
quarter of 2017, as compared to 1,258 homes for the same period in
2016. Average selling communities increased 6% to 126.8
for the second quarter of 2017 compared to 119.5 for the second
quarter of 2016. The Company’s overall absorption rate per
average selling community for the second quarter of 2017 was 11.4
orders (3.8 monthly) compared to 10.5 orders (3.5 monthly) during
the second quarter of 2016.
The Company ended the quarter with 2,108 homes in backlog,
representing approximately $1.3 billion. The average sales price of
homes in backlog as of June 30, 2017 increased $64,000, or
11%, to $635,000 compared to $571,000 at June 30,
2016.
Homebuilding gross margin percentage for the second quarter of
2017 decreased to 20.1% compared to 22.3% for the second quarter of
2016; however, it increased 130 basis points sequentially from
the first quarter of 2017. Excluding interest and
impairments and lot option abandonments in cost of home sales,
adjusted homebuilding gross margin percentage was 22.5%* for the
second quarter of 2017 compared to 24.4%* for the second quarter of
2016. The decrease in homebuilding gross margin
percentage was largely due to the mix of homes delivered, in
particular a lower portion of homes delivered from our long-dated
California communities, which produce gross margins above the
Company average.
Selling, general and administrative ("SG&A") expense for the
second quarter of 2017 increased to 11.6% of home sales revenue as
compared to 11.3% for the second quarter of 2016 due to the
incremental general and administrative costs associated with
growing our Company.
“TRI Pointe continues to be at the forefront of homebuilding,
with unique home designs and thoughtfully engineered communities
that cater to the lifestyles of today’s homebuyers,” said TRI
Pointe Group Chief Operating Officer Tom Mitchell. “We have
placed an added emphasis on creating living spaces that appeal to
two of the biggest buyer segments in the marketplace - Millennials
and Active Adults - and our strong performance this quarter is a
direct result of these efforts. We believe that our
commitment to homebuilding design and innovation gives us a
competitive advantage over other production homebuilders, and
creates long-term value for our stockholders.”
* See “Reconciliation of Non-GAAP Financial Measures”
Outlook
For the third quarter of 2017, the Company expects to open 10
new communities, and close out of 19, resulting in 122 active
selling communities as of June 30, 2017. In addition,
the Company anticipates delivering approximately 50% to 55% of its
2,108 units in backlog as of June 30, 2017 at an average sales
price of approximately $570,000. The Company anticipates its
homebuilding gross margin percentage to be in a range of 19.0% to
20.0% for the third quarter.
For the full year 2017, the Company is lowering its original
guidance of growing average selling communities by 10% to 8% due to
the higher than anticipated absorption rate through the second
quarter of 2017, causing early close out of communities. In
addition, the Company is raising the lower end of its anticipated
delivery range from 4,500 to 4,600 homes, resulting in a delivery
range between 4,600 and 4,800 homes. The Company is
reiterating its original guidance of a full year average sales
price of $570,000, a homebuilding gross margin percentage in a
range of 20.0% to 21.0% and a SG&A expense ratio in the range
of 10.2% to 10.4% of home sales revenue. In addition, the
Company is raising its original guidance of land and lot sales
gross margin to approximately $50 million, from $45 million, most
of which is expected to be realized in the third quarter of
2017.
Stock Repurchase Program
On July 25, 2017, our Board of Directors authorized the
repurchase of up to an additional $50 million of Company common
stock under the Company's existing Repurchase Program, increasing
the aggregate authorization from $100 million to $150 million.
Under the Repurchase Program, the Company may repurchase shares of
its outstanding common stock with an aggregate value of up to
$150 million through March 31, 2018. Purchases of common
stock pursuant to the Repurchase Program may be made in open market
transactions effected through a broker-dealer at prevailing market
prices, in block trades, or by other means in accordance with
federal securities laws, including pursuant to any trading plan
that may be adopted in accordance with Rule 10b5-1 of the
Securities Exchange Act of 1934, as amended. We are not
obligated under the Repurchase Program to repurchase any specific
number or amount of shares of common stock, and we may modify,
suspend or discontinue the program at any time. Our
management will determine the timing and amount of repurchase in
its discretion based on a variety of factors, such as the market
price of our common stock, corporate requirements, general market
economic conditions and legal requirements. For the three
months ended June 30, 2017, we repurchased and retired
7,979,618 shares of our common stock under the Repurchase Program
at a weighted average price of $12.43 per share for a total cost of
$99.2 million. For the six months ended June 30, 2017,
we repurchased and retired 8,019,005 shares of our common stock
under the Repurchase Program at a weighted average price of $12.43
per share for a total cost of $99.7 million. With the
increase to the Repurchase Program, the total remaining
authorization for future repurchases under the Repurchase Program
is approximately $50.3 million.
Earnings Conference Call
The Company will host a conference call via live webcast for
investors and other interested parties beginning at 10:00 a.m.
Eastern Time on Wednesday, July 26, 2017. The call
will be hosted by Doug Bauer, Chief Executive Officer, Tom
Mitchell, President and Chief Operating Officer and Mike Grubbs,
Chief Financial Officer.
Interested parties can listen to the call live and view the
related presentation slides on the internet through the
Investor Relations section of the Company’s website at
www.TRIPointeGroup.com. Listeners should go to the website at least
fifteen minutes prior to the call to download and install any
necessary audio software. The call can also be accessed
by dialing 1-877-407-3982 for domestic participants or
1-201-493-6780 for international participants. Participants
should ask for the TRI Pointe Group Second Quarter 2017 Earnings
Conference Call. Those dialing in should do so at least ten
minutes prior to the start. The replay of the call will be
available for two weeks following the call. To access
the replay, the domestic dial-in number is 1-844-512-2921, the
international dial-in number is 1-412-317-6671, and the reference
code is #13665509. An archive of the webcast will be
available on the Company’s website for a limited time.
About TRI Pointe Group, Inc.
Headquartered in Irvine, California, TRI Pointe Group, Inc.
(NYSE:TPH) is one of the top ten largest public homebuilders by
equity market capitalization in the United States. The company
designs, constructs and sells premium single-family homes through
its portfolio of six quality brands across eight states, including
Maracay Homes® in Arizona; Pardee Homes® in California and Nevada;
Quadrant Homes® in Washington; Trendmaker® Homes in Texas; TRI
Pointe Homes® in California and Colorado; and Winchester® Homes in
Maryland and Virginia. Additional information is available at
www.TRIPointeGroup.com. Winchester is a registered trademark and is
used with permission.
Forward-Looking Statements
Various statements contained in this press release, 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 estimates concerning the
timing and success of specific projects and our future production,
land and lot sales, operational and financial results, financial
condition, prospects, and capital spending. Our
forward-looking statements are generally accompanied by words such
as “anticipate,” “believe,” “estimate,” “goal,” “guidance,”
“expect,” “intend,” “outlook,” “project,” “potential,” “plan,”
“predict,” “target,” “will,” or other words that convey
future events or outcomes. The forward-looking
statements in this press release speak only as of the date of this
press release, and we disclaim any obligation to update these
statements unless required by law, and we caution you not to rely
on them unduly. These forward-looking statements are
inherently subject to significant business, economic, competitive,
regulatory and other risks, contingencies and uncertainties, most
of which are difficult to predict and many of which are beyond our
control. The following factors, among others, may cause
our actual results, performance or achievements to differ
materially from any future results, performance or achievements
expressed or implied by these forward-looking statements: the
effect of general economic conditions, including employment rates,
housing starts, interest rate levels, availability of financing for
home mortgages and strength of the U.S. dollar; market demand for
our products, which is related to the strength of the various U.S.
business segments and U.S. and international economic conditions;
levels of competition; the successful execution of our internal
performance plans, including restructuring and cost reduction
initiatives; global economic conditions; raw material prices; oil
and other energy prices; the effect of weather, including the
re-occurrence of drought conditions in California; the risk of loss
from earthquakes, volcanoes, fires, floods, droughts, windstorms,
hurricanes, pest infestations and other natural disasters;
transportation costs; federal and state tax policies; the effect of
land use, environment and other governmental regulations; legal
proceedings or disputes and the adequacy of reserves; risks
relating to any unforeseen changes to or effects on liabilities,
future capital expenditures, revenues, expenses, earnings,
synergies, indebtedness, financial condition, losses and future
prospects; changes in accounting principles; risks related to
unauthorized access to our computer systems, theft of our
customers’ confidential information or other forms of cyber-attack;
and additional factors discussed under the sections captioned “Risk
Factors” included in our annual and quarterly reports filed with
the Securities and Exchange Commission. The foregoing
list is not exhaustive. New risk factors may emerge from
time to time and it is not possible for management to predict all
such risk factors or to assess the impact of such risk factors on
our business.
KEY OPERATIONS AND FINANCIAL
DATA |
(dollars in thousands) |
(unaudited) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2017 |
|
2016 |
|
Change |
|
2017 |
|
2016 |
|
Change |
Operating Data: |
|
|
|
|
|
|
|
|
|
|
|
Home
sales revenue |
$ |
568,816 |
|
|
$ |
556,925 |
|
|
$ |
11,891 |
|
|
$ |
960,820 |
|
|
$ |
979,980 |
|
|
$ |
(19,160 |
) |
Homebuilding gross margin |
$ |
114,575 |
|
|
$ |
124,187 |
|
|
$ |
(9,612 |
) |
|
$ |
188,175 |
|
|
$ |
222,743 |
|
|
$ |
(34,568 |
) |
Homebuilding gross margin % |
20.1 |
% |
|
22.3 |
% |
|
(2.2 |
)% |
|
19.6 |
% |
|
22.7 |
% |
|
(3.1 |
)% |
Adjusted
homebuilding gross margin %* |
22.5 |
% |
|
24.4 |
% |
|
(1.9 |
)% |
|
22.0 |
% |
|
24.8 |
% |
|
(2.8 |
)% |
Land and
lot sales revenue |
$ |
865 |
|
|
$ |
67,314 |
|
|
$ |
(66,449 |
) |
|
$ |
1,443 |
|
|
$ |
67,669 |
|
|
$ |
(66,226 |
) |
Land and
lot gross margin |
$ |
221 |
|
|
$ |
52,854 |
|
|
$ |
(52,633 |
) |
|
$ |
145 |
|
|
$ |
52,430 |
|
|
$ |
(52,285 |
) |
Land and
lot gross margin % |
25.5 |
% |
|
78.5 |
% |
|
(53.0 |
)% |
|
10.0 |
% |
|
77.5 |
% |
|
(67.5 |
)% |
SG&A
expense |
$ |
66,018 |
|
|
$ |
62,932 |
|
|
$ |
3,086 |
|
|
$ |
127,367 |
|
|
$ |
117,784 |
|
|
$ |
9,583 |
|
SG&A expense as a %
of home sales revenue |
11.6 |
% |
|
11.3 |
% |
|
0.3 |
% |
|
13.3 |
% |
|
12.0 |
% |
|
1.3 |
% |
Net income available to
common stockholders |
$ |
32,714 |
|
|
$ |
73,926 |
|
|
$ |
(41,212 |
) |
|
$ |
40,907 |
|
|
$ |
102,476 |
|
|
$ |
(61,569 |
) |
Adjusted
EBITDA* |
$ |
70,522 |
|
|
$ |
132,214 |
|
|
$ |
(61,692 |
) |
|
$ |
98,202 |
|
|
$ |
188,731 |
|
|
$ |
(90,529 |
) |
Interest
incurred |
$ |
19,931 |
|
|
$ |
16,280 |
|
|
$ |
3,651 |
|
|
$ |
38,804 |
|
|
$ |
31,429 |
|
|
$ |
7,375 |
|
Interest
in cost of home sales |
$ |
13,145 |
|
|
$ |
11,438 |
|
|
$ |
1,707 |
|
|
$ |
22,825 |
|
|
$ |
20,268 |
|
|
$ |
2,557 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Data: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net new
home orders |
1,445 |
|
|
1,258 |
|
|
187 |
|
|
2,744 |
|
|
2,407 |
|
|
337 |
|
New homes
delivered |
1,071 |
|
|
994 |
|
|
77 |
|
|
1,829 |
|
|
1,765 |
|
|
64 |
|
Average
selling price of homes delivered |
$ |
531 |
|
|
$ |
560 |
|
|
$ |
(29 |
) |
|
$ |
525 |
|
|
$ |
555 |
|
|
$ |
(30 |
) |
Average
selling communities |
126.8 |
|
|
119.5 |
|
|
7.3 |
|
|
126.6 |
|
|
115.9 |
|
|
10.7 |
|
Selling
communities at end of period |
131 |
|
|
117 |
|
|
14 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
Cancellation rate |
15 |
% |
|
13 |
% |
|
2 |
% |
|
15 |
% |
|
13 |
% |
|
2 |
% |
Backlog
(estimated dollar value) |
$ |
1,339,217 |
|
|
$ |
1,026,219 |
|
|
$ |
312,998 |
|
|
|
|
|
|
|
Backlog
(homes) |
2,108 |
|
|
1,798 |
|
|
310 |
|
|
|
|
|
|
|
Average
selling price in backlog |
$ |
635 |
|
|
$ |
571 |
|
|
$ |
64 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
|
|
|
|
|
|
|
|
2017 |
|
2016 |
|
Change |
Balance Sheet
Data: |
|
|
|
|
|
|
|
|
|
|
|
Cash and
cash equivalents |
|
|
|
|
|
|
$ |
114,945 |
|
|
$ |
208,657 |
|
|
$ |
(93,712 |
) |
Real
estate inventories |
|
|
|
|
|
|
$ |
3,208,341 |
|
|
$ |
2,910,627 |
|
|
$ |
297,714 |
|
Lots
owned or controlled |
|
|
|
|
|
|
28,892 |
|
|
28,309 |
|
|
583 |
|
Homes
under construction (1) |
|
|
|
|
|
|
2,488 |
|
|
1,605 |
|
|
883 |
|
Homes
completed, unsold |
|
|
|
|
|
|
239 |
|
|
405 |
|
|
(166 |
) |
Debt |
|
|
|
|
|
|
$ |
1,617,861 |
|
|
$ |
1,382,033 |
|
|
$ |
235,828 |
|
Stockholders' equity |
|
|
|
|
|
|
$ |
1,777,954 |
|
|
$ |
1,829,447 |
|
|
$ |
(51,493 |
) |
Book
capitalization |
|
|
|
|
|
|
$ |
3,395,815 |
|
|
$ |
3,211,480 |
|
|
$ |
184,335 |
|
Ratio of
debt-to-capital |
|
|
|
|
|
|
47.6 |
% |
|
43.0 |
% |
|
4.6 |
% |
Ratio of
net debt-to-net capital* |
|
|
|
|
|
|
45.8 |
% |
|
39.1 |
% |
|
6.7 |
% |
__________(1) Homes under construction included 80 and 65 models
at June 30, 2017 and December 31, 2016, respectively.*
See “Reconciliation of Non-GAAP Financial Measures”
|
CONSOLIDATED BALANCE SHEETS |
(in thousands, except share amounts) |
|
|
June 30, |
|
December 31, |
|
2017 |
|
2016 |
Assets |
(unaudited) |
|
|
Cash and
cash equivalents |
$ |
114,945 |
|
|
$ |
208,657 |
|
Receivables |
73,003 |
|
|
82,500 |
|
Real
estate inventories |
3,208,341 |
|
|
2,910,627 |
|
Investments in unconsolidated entities |
18,787 |
|
|
17,546 |
|
Goodwill
and other intangible assets, net |
161,228 |
|
|
161,495 |
|
Deferred
tax assets, net |
117,582 |
|
|
123,223 |
|
Other
assets |
58,111 |
|
|
60,592 |
|
Total
assets |
$ |
3,751,997 |
|
|
$ |
3,564,640 |
|
|
|
|
|
Liabilities |
|
|
|
Accounts
payable |
$ |
63,251 |
|
|
$ |
70,252 |
|
Accrued
expenses and other liabilities |
278,017 |
|
|
263,845 |
|
Unsecured
revolving credit facility |
150,000 |
|
|
200,000 |
|
Seller
financed loans |
— |
|
|
13,726 |
|
Senior
notes |
1,467,861 |
|
|
1,168,307 |
|
Total
liabilities |
1,959,129 |
|
|
1,716,130 |
|
|
|
|
|
Commitments and contingencies |
|
|
|
|
|
|
|
Equity |
|
|
|
Stockholders' Equity: |
|
|
|
Preferred
stock, $0.01 par value, 50,000,000 shares authorized; no
shares issued and outstanding as of June 30, 2017 and
December 31, 2016, respectively |
— |
|
|
— |
|
Common
stock, $0.01 par value, 500,000,000 shares authorized;
151,320,521 and 158,626,229 shares issued and outstanding at
June 30, 2017 and December 31, 2016, respectively |
1,513 |
|
|
1,586 |
|
Additional paid-in capital |
788,495 |
|
|
880,822 |
|
Retained
earnings |
987,946 |
|
|
947,039 |
|
Total
stockholders' equity |
1,777,954 |
|
|
1,829,447 |
|
Noncontrolling interests |
14,914 |
|
|
19,063 |
|
Total
equity |
1,792,868 |
|
|
1,848,510 |
|
Total
liabilities and equity |
$ |
3,751,997 |
|
|
$ |
3,564,640 |
|
|
|
|
|
|
|
|
|
CONSOLIDATED STATEMENT OF
OPERATIONS |
(in thousands, except share and per share
amounts) |
(unaudited) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
Homebuilding: |
|
|
|
|
|
|
|
Home
sales revenue |
$ |
568,816 |
|
|
$ |
556,925 |
|
|
$ |
960,820 |
|
|
$ |
979,980 |
|
Land and
lot sales revenue |
865 |
|
|
67,314 |
|
|
1,443 |
|
|
67,669 |
|
Other
operations revenue |
600 |
|
|
604 |
|
|
1,168 |
|
|
1,184 |
|
Total
revenues |
570,281 |
|
|
624,843 |
|
|
963,431 |
|
|
1,048,833 |
|
Cost of
home sales |
454,241 |
|
|
432,738 |
|
|
772,645 |
|
|
757,237 |
|
Cost of
land and lot sales |
644 |
|
|
14,460 |
|
|
1,298 |
|
|
15,239 |
|
Other
operations expense |
591 |
|
|
583 |
|
|
1,151 |
|
|
1,149 |
|
Sales and
marketing |
32,330 |
|
|
32,448 |
|
|
59,030 |
|
|
58,769 |
|
General
and administrative |
33,688 |
|
|
30,484 |
|
|
68,337 |
|
|
59,015 |
|
Homebuilding income from operations |
48,787 |
|
|
114,130 |
|
|
60,970 |
|
|
157,424 |
|
Equity in
income of unconsolidated entities |
1,508 |
|
|
215 |
|
|
1,646 |
|
|
201 |
|
Other
income, net |
44 |
|
|
151 |
|
|
121 |
|
|
266 |
|
Homebuilding income before income taxes |
50,339 |
|
|
114,496 |
|
|
62,737 |
|
|
157,891 |
|
Financial
Services: |
|
|
|
|
|
|
|
Revenues |
345 |
|
|
379 |
|
|
586 |
|
|
527 |
|
Expenses |
77 |
|
|
53 |
|
|
151 |
|
|
111 |
|
Equity in
income of unconsolidated entities |
1,294 |
|
|
1,284 |
|
|
1,560 |
|
|
1,999 |
|
Financial
services income before income taxes |
1,562 |
|
|
1,610 |
|
|
1,995 |
|
|
2,415 |
|
Income before
income taxes |
51,901 |
|
|
116,106 |
|
|
64,732 |
|
|
160,306 |
|
Provision for income
taxes |
(19,098 |
) |
|
(41,913 |
) |
|
(23,712 |
) |
|
(57,403 |
) |
Net income |
32,803 |
|
|
74,193 |
|
|
41,020 |
|
|
102,903 |
|
Net income attributable
to noncontrolling interests |
(89 |
) |
|
(267 |
) |
|
(113 |
) |
|
(427 |
) |
Net income available to
common stockholders |
$ |
32,714 |
|
|
$ |
73,926 |
|
|
$ |
40,907 |
|
|
$ |
102,476 |
|
Earnings per share |
|
|
|
|
|
|
|
Basic |
$ |
0.21 |
|
|
$ |
0.46 |
|
|
$ |
0.26 |
|
|
$ |
0.63 |
|
Diluted |
$ |
0.21 |
|
|
$ |
0.46 |
|
|
$ |
0.26 |
|
|
$ |
0.63 |
|
Weighted average shares
outstanding |
|
|
|
|
|
|
|
Basic |
155,603,699 |
|
|
161,826,275 |
|
|
157,335,296 |
|
|
161,882,378 |
|
Diluted |
156,140,543 |
|
|
162,259,283 |
|
|
157,924,561 |
|
|
162,245,399 |
|
MARKET DATA BY REPORTING SEGMENT &
STATE |
(dollars in thousands) |
(unaudited) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
NewHomesDelivered |
|
AverageSalesPrice |
|
NewHomesDelivered |
|
AverageSalesPrice |
|
NewHomesDelivered |
|
AverageSalesPrice |
|
NewHomesDelivered |
|
AverageSalesPrice |
New Homes
Delivered: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maracay
Homes |
164 |
|
|
$ |
462 |
|
|
120 |
|
|
$ |
399 |
|
|
283 |
|
|
$ |
448 |
|
|
235 |
|
|
$ |
397 |
|
Pardee
Homes |
372 |
|
|
485 |
|
|
318 |
|
|
562 |
|
|
568 |
|
|
465 |
|
|
526 |
|
|
566 |
|
Quadrant Homes |
64 |
|
|
620 |
|
|
105 |
|
|
521 |
|
|
127 |
|
|
626 |
|
|
197 |
|
|
509 |
|
Trendmaker Homes |
133 |
|
|
487 |
|
|
126 |
|
|
502 |
|
|
239 |
|
|
488 |
|
|
214 |
|
|
500 |
|
TRI Pointe Homes |
243 |
|
|
635 |
|
|
217 |
|
|
704 |
|
|
451 |
|
|
632 |
|
|
418 |
|
|
681 |
|
Winchester Homes |
95 |
|
|
569 |
|
|
108 |
|
|
553 |
|
|
161 |
|
|
550 |
|
|
175 |
|
|
555 |
|
Total |
1,071 |
|
|
$ |
531 |
|
|
994 |
|
|
$ |
560 |
|
|
1,829 |
|
|
$ |
525 |
|
|
1,765 |
|
|
$ |
555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
NewHomesDelivered |
|
AverageSalesPrice |
|
NewHomesDelivered |
|
AverageSalesPrice |
|
NewHomesDelivered |
|
AverageSalesPrice |
|
NewHomesDelivered |
|
AverageSalesPrice |
New Homes
Delivered: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California |
438 |
|
|
$ |
580 |
|
|
367 |
|
|
$ |
718 |
|
|
737 |
|
|
$ |
576 |
|
|
681 |
|
|
$ |
701 |
|
Colorado |
37 |
|
|
617 |
|
|
50 |
|
|
509 |
|
|
67 |
|
|
593 |
|
|
88 |
|
|
497 |
|
Maryland |
69 |
|
|
526 |
|
|
66 |
|
|
499 |
|
|
115 |
|
|
515 |
|
|
114 |
|
|
501 |
|
Virginia |
26 |
|
|
681 |
|
|
42 |
|
|
638 |
|
|
46 |
|
|
638 |
|
|
61 |
|
|
657 |
|
Arizona |
164 |
|
|
462 |
|
|
120 |
|
|
399 |
|
|
283 |
|
|
448 |
|
|
235 |
|
|
397 |
|
Nevada |
140 |
|
|
412 |
|
|
118 |
|
|
359 |
|
|
215 |
|
|
395 |
|
|
175 |
|
|
349 |
|
Texas |
133 |
|
|
487 |
|
|
126 |
|
|
502 |
|
|
239 |
|
|
488 |
|
|
214 |
|
|
500 |
|
Washington |
64 |
|
|
620 |
|
|
105 |
|
|
521 |
|
|
127 |
|
|
626 |
|
|
197 |
|
|
509 |
|
Total |
1,071 |
|
|
$ |
531 |
|
|
994 |
|
|
$ |
560 |
|
|
1,829 |
|
|
$ |
525 |
|
|
1,765 |
|
|
$ |
555 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARKET DATA BY REPORTING SEGMENT & STATE,
continued |
(unaudited) |
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Net New Home Orders |
|
Average Selling Communities |
|
Net New Home Orders |
|
Average Selling Communities |
|
Net NewHomeOrders |
|
AverageSellingCommunities |
|
Net NewHomeOrders |
|
AverageSellingCommunities |
Net New Home
Orders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maracay
Homes |
162 |
|
|
16.0 |
|
|
191 |
|
|
18.5 |
|
|
346 |
|
|
16.1 |
|
|
392 |
|
|
18.3 |
|
Pardee
Homes |
483 |
|
|
28.8 |
|
|
340 |
|
|
22.3 |
|
|
861 |
|
|
28.6 |
|
|
653 |
|
|
22.7 |
|
Quadrant Homes |
107 |
|
|
6.8 |
|
|
92 |
|
|
9.0 |
|
|
227 |
|
|
7.3 |
|
|
225 |
|
|
9.0 |
|
Trendmaker Homes |
129 |
|
|
31.7 |
|
|
133 |
|
|
28.0 |
|
|
280 |
|
|
31.9 |
|
|
255 |
|
|
25.7 |
|
TRI Pointe Homes |
413 |
|
|
31.5 |
|
|
379 |
|
|
28.2 |
|
|
766 |
|
|
30.7 |
|
|
644 |
|
|
26.8 |
|
Winchester Homes |
151 |
|
|
12.0 |
|
|
123 |
|
|
13.5 |
|
|
264 |
|
|
12.0 |
|
|
238 |
|
|
13.4 |
|
Total |
1,445 |
|
|
126.8 |
|
|
1,258 |
|
|
119.5 |
|
|
2,744 |
|
|
126.6 |
|
|
2,407 |
|
|
115.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Net New Home Orders |
|
Average Selling Communities |
|
Net New Home Orders |
|
Average Selling Communities |
|
Net New Home Orders |
|
Average Selling Communities |
|
Net New Home Orders |
|
Average Selling Communities |
Net New Home
Orders: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California |
689 |
|
|
42.5 |
|
|
547 |
|
|
34.4 |
|
|
1,253 |
|
|
42.3 |
|
|
953 |
|
|
33.7 |
|
Colorado |
51 |
|
|
6.5 |
|
|
33 |
|
|
4.8 |
|
|
104 |
|
|
5.9 |
|
|
76 |
|
|
4.9 |
|
Maryland |
117 |
|
|
9.0 |
|
|
78 |
|
|
6.5 |
|
|
184 |
|
|
8.6 |
|
|
142 |
|
|
6.4 |
|
Virginia |
34 |
|
|
3.0 |
|
|
45 |
|
|
7.0 |
|
|
80 |
|
|
3.4 |
|
|
96 |
|
|
7.0 |
|
Arizona |
162 |
|
|
16.0 |
|
|
191 |
|
|
18.5 |
|
|
346 |
|
|
16.1 |
|
|
392 |
|
|
18.3 |
|
Nevada |
156 |
|
|
11.3 |
|
|
139 |
|
|
11.3 |
|
|
270 |
|
|
11.1 |
|
|
268 |
|
|
10.9 |
|
Texas |
129 |
|
|
31.7 |
|
|
133 |
|
|
28.0 |
|
|
280 |
|
|
31.9 |
|
|
255 |
|
|
25.7 |
|
Washington |
107 |
|
|
6.8 |
|
|
92 |
|
|
9.0 |
|
|
227 |
|
|
7.3 |
|
|
225 |
|
|
9.0 |
|
Total |
1,445 |
|
|
126.8 |
|
|
1,258 |
|
|
119.5 |
|
|
2,744 |
|
|
126.6 |
|
|
2,407 |
|
|
115.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARKET DATA BY REPORTING SEGMENT & STATE,
continued |
(dollars in thousands) |
(unaudited) |
|
|
As of June 30, 2017 |
|
As of June 30, 2016 |
|
Backlog Units |
|
Backlog Dollar Value |
|
Average Sales Price |
|
Backlog Units |
|
Backlog Dollar Value |
|
Average Sales Price |
Backlog: |
|
|
|
|
|
|
|
|
|
|
|
Maracay
Homes |
311 |
|
|
$ |
156,611 |
|
|
$ |
504 |
|
|
360 |
|
|
$ |
153,107 |
|
|
$ |
425 |
|
Pardee
Homes |
553 |
|
|
369,021 |
|
|
667 |
|
|
401 |
|
|
236,903 |
|
|
591 |
|
Quadrant
Homes |
201 |
|
|
144,204 |
|
|
717 |
|
|
171 |
|
|
99,366 |
|
|
581 |
|
Trendmaker Homes |
204 |
|
|
105,663 |
|
|
518 |
|
|
177 |
|
|
94,850 |
|
|
536 |
|
TRI
Pointe Homes |
613 |
|
|
428,281 |
|
|
699 |
|
|
516 |
|
|
330,262 |
|
|
640 |
|
Winchester Homes |
226 |
|
|
135,437 |
|
|
599 |
|
|
173 |
|
|
111,731 |
|
|
646 |
|
Total |
2,108 |
|
|
$ |
1,339,217 |
|
|
$ |
635 |
|
|
1,798 |
|
|
$ |
1,026,219 |
|
|
$ |
571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of June 30, 2017 |
|
As of June 30, 2016 |
|
Backlog Units |
|
Backlog Dollar Value |
|
Average Sales Price |
|
Backlog Units |
|
Backlog Dollar Value |
|
Average Sales Price |
Backlog: |
|
|
|
|
|
|
|
|
|
|
|
California |
918 |
|
|
$ |
660,548 |
|
|
$ |
720 |
|
|
673 |
|
|
$ |
454,935 |
|
|
$ |
676 |
|
Colorado |
96 |
|
|
60,686 |
|
|
632 |
|
|
72 |
|
|
39,928 |
|
|
555 |
|
Maryland |
171 |
|
|
96,443 |
|
|
564 |
|
|
105 |
|
|
64,884 |
|
|
618 |
|
Virginia |
55 |
|
|
38,994 |
|
|
709 |
|
|
68 |
|
|
46,846 |
|
|
689 |
|
Arizona |
311 |
|
|
156,611 |
|
|
504 |
|
|
360 |
|
|
153,107 |
|
|
425 |
|
Nevada |
152 |
|
|
76,068 |
|
|
500 |
|
|
172 |
|
|
72,302 |
|
|
420 |
|
Texas |
204 |
|
|
105,663 |
|
|
518 |
|
|
177 |
|
|
94,850 |
|
|
536 |
|
Washington |
201 |
|
|
144,204 |
|
|
717 |
|
|
171 |
|
|
99,367 |
|
|
581 |
|
Total |
2,108 |
|
|
$ |
1,339,217 |
|
|
$ |
635 |
|
|
1,798 |
|
|
$ |
1,026,219 |
|
|
$ |
571 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
MARKET DATA BY REPORTING SEGMENT & STATE,
continued |
(unaudited) |
|
|
June 30, |
|
December 31, |
|
2017 |
|
2016 |
Lots Owned or
Controlled: |
|
|
|
Maracay
Homes |
3,023 |
|
|
2,053 |
|
Pardee
Homes |
16,162 |
|
|
16,912 |
|
Quadrant
Homes |
1,852 |
|
|
1,582 |
|
Trendmaker Homes |
1,912 |
|
|
1,999 |
|
TRI
Pointe Homes |
3,494 |
|
|
3,479 |
|
Winchester Homes |
2,449 |
|
|
2,284 |
|
Total |
28,892 |
|
|
28,309 |
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
2017 |
|
2016 |
Lots Owned or
Controlled: |
|
|
|
California |
16,668 |
|
|
17,245 |
|
Colorado |
847 |
|
|
918 |
|
Maryland |
1,742 |
|
|
1,779 |
|
Virginia |
707 |
|
|
505 |
|
Arizona |
3,023 |
|
|
2,053 |
|
Nevada |
2,141 |
|
|
2,228 |
|
Texas |
1,912 |
|
|
1,999 |
|
Washington |
1,852 |
|
|
1,582 |
|
Total |
28,892 |
|
|
28,309 |
|
|
|
|
|
|
|
|
|
|
June 30, |
|
December 31, |
|
2017 |
|
2016 |
Lots by
Ownership Type: |
|
|
|
Lots
owned |
25,308 |
|
|
25,283 |
|
Lots
controlled (1) |
3,584 |
|
|
3,026 |
|
Total |
28,892 |
|
|
28,309 |
|
|
|
|
|
|
|
__________(1) As of June 30, 2017 and December 31,
2016, lots controlled included lots that were under land option
contracts or purchase contracts.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES(unaudited)
In this press release, 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 management and
investors in evaluating the Company’s operating performance and
financing structure. We also believe these measures facilitate the
comparison of our operating performance and financing structure
with other companies in our industry. Because these measures are
not calculated in accordance with Generally Accepted Accounting
Principles (“GAAP”), they may not be comparable to other similarly
titled measures of other companies and should not be considered in
isolation or as a substitute for, or superior to, financial
measures prepared in accordance with GAAP.
The following tables reconcile 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 isolates the impact
that leverage has on homebuilding gross margin and permits
investors to make better comparisons with our competitors, who
adjust gross margins in a similar fashion.
|
Three Months Ended June 30, |
|
2017 |
|
% |
|
2016 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
Home sales revenue |
$ |
568,816 |
|
|
100.0 |
% |
|
$ |
556,925 |
|
|
100.0 |
% |
Cost of home sales |
454,241 |
|
|
79.9 |
% |
|
432,738 |
|
|
77.7 |
% |
Homebuilding gross
margin |
114,575 |
|
|
20.1 |
% |
|
124,187 |
|
|
22.3 |
% |
Add: interest in cost of home sales |
13,145 |
|
|
2.3 |
% |
|
11,438 |
|
|
2.1 |
% |
Add: impairments and lot option abandonments |
507 |
|
|
0.1 |
% |
|
107 |
|
|
0.0 |
% |
Adjusted homebuilding
gross margin |
$ |
128,227 |
|
|
22.5 |
% |
|
$ |
135,732 |
|
|
24.4 |
% |
Homebuilding gross
margin percentage |
20.1 |
% |
|
|
|
22.3 |
% |
|
|
Adjusted homebuilding
gross margin percentage |
22.5 |
% |
|
|
|
24.4 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months Ended June 30, |
|
2017 |
|
% |
|
2016 |
|
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(dollars in thousands) |
Home sales revenue |
$ |
960,820 |
|
|
100.0 |
% |
|
$ |
979,980 |
|
|
100.0 |
% |
Cost of home sales |
772,645 |
|
|
80.4 |
% |
|
757,237 |
|
|
77.3 |
% |
Homebuilding gross
margin |
188,175 |
|
|
19.6 |
% |
|
222,743 |
|
|
22.7 |
% |
Add: interest in cost of home sales |
22,825 |
|
|
2.4 |
% |
|
20,268 |
|
|
2.1 |
% |
Add: impairments and lot option abandonments |
795 |
|
|
0.1 |
% |
|
289 |
|
|
0.0 |
% |
Adjusted homebuilding
gross margin |
$ |
211,795 |
|
|
22.0 |
% |
|
$ |
243,300 |
|
|
24.8 |
% |
Homebuilding gross
margin percentage |
19.6 |
% |
|
|
|
22.7 |
% |
|
|
Adjusted homebuilding
gross margin percentage |
22.0 |
% |
|
|
|
24.8 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (continued)(unaudited)
The following table reconciles the Company’s ratio of
debt-to-capital to the non-GAAP 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 understand the
leverage employed in our operations and as an indicator of the
Company’s ability to obtain financing.
|
June 30, 2017 |
|
December 31, 2016 |
Unsecured revolving
credit facility |
$ |
150,000 |
|
|
$ |
200,000 |
|
Seller financed
loans |
— |
|
|
13,726 |
|
Senior notes |
1,467,861 |
|
|
1,168,307 |
|
Total
debt |
1,617,861 |
|
|
1,382,033 |
|
Stockholders’
equity |
1,777,954 |
|
|
1,829,447 |
|
Total
capital |
$ |
3,395,815 |
|
|
$ |
3,211,480 |
|
Ratio of
debt-to-capital(1) |
47.6 |
% |
|
43.0 |
% |
|
|
|
|
|
|
|
|
Total debt |
$ |
1,617,861 |
|
|
$ |
1,382,033 |
|
Less: Cash and cash
equivalents |
(114,945 |
) |
|
(208,657 |
) |
Net
debt |
1,502,916 |
|
|
1,173,376 |
|
Stockholders’
equity |
1,777,954 |
|
|
1,829,447 |
|
Net
capital |
$ |
3,280,870 |
|
|
$ |
3,002,823 |
|
Ratio of net
debt-to-net capital(2) |
45.8 |
% |
|
39.1 |
% |
|
|
|
|
|
|
__________(1) The ratio of debt-to-capital is computed as the
quotient obtained by dividing debt by the sum of debt plus
equity.(2) The ratio of net debt-to-net capital is computed as
the quotient obtained by dividing net debt (which is debt less cash
and cash equivalents) by the sum of net debt plus equity.
RECONCILIATION OF NON-GAAP FINANCIAL
MEASURES (continued)(unaudited)
The following table calculates the non-GAAP measures of EBITDA
and Adjusted EBITDA and reconciles those amounts to net income, as
reported and prepared in accordance with GAAP. EBITDA
means net income before (a) interest expense, (b) income
taxes, (c) depreciation and amortization, (d) expensing
of previously capitalized interest included in costs of home sales
and (e) amortization of stock-based compensation. Adjusted
EBITDA means EBITDA before (f) impairment and lot option
abandonments and (g) restructuring charges. Other companies may
calculate EBITDA and Adjusted EBITDA (or similarly titled measures)
differently. We believe EBITDA and Adjusted EBITDA are useful
measures of the Company’s ability to service debt and obtain
financing.
|
Three Months Ended June 30, |
|
Six Months Ended June 30, |
|
2017 |
|
2016 |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(in thousands) |
Net income available to
common stockholders |
$ |
32,714 |
|
|
$ |
73,926 |
|
|
$ |
40,907 |
|
|
$ |
102,476 |
|
Interest
expense: |
|
|
|
|
|
|
|
Interest
incurred |
19,931 |
|
|
16,280 |
|
|
38,804 |
|
|
31,429 |
|
Interest
capitalized |
(19,931 |
) |
|
(16,280 |
) |
|
(38,804 |
) |
|
(31,429 |
) |
Amortization of interest in cost of sales |
13,185 |
|
|
11,563 |
|
|
22,872 |
|
|
20,393 |
|
Provision
for income taxes |
19,098 |
|
|
41,913 |
|
|
23,712 |
|
|
57,403 |
|
Depreciation and amortization |
877 |
|
|
732 |
|
|
1,698 |
|
|
1,457 |
|
Amortization of stock-based compensation |
3,903 |
|
|
3,758 |
|
|
7,744 |
|
|
6,363 |
|
EBITDA |
69,777 |
|
|
131,892 |
|
|
96,933 |
|
|
188,092 |
|
Impairments and lot abandonments |
507 |
|
|
107 |
|
|
828 |
|
|
289 |
|
Restructuring charges |
238 |
|
|
215 |
|
|
441 |
|
|
350 |
|
Adjusted EBITDA |
$ |
70,522 |
|
|
$ |
132,214 |
|
|
$ |
98,202 |
|
|
$ |
188,731 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Investor Relations Contact:
Chris Martin, TRI Pointe Group
Drew Mackintosh, Mackintosh Investor Relations
InvestorRelations@TRIPointeGroup.com, 949-478-8696
Media Contact:
Carol Ruiz, cruiz@newgroundco.com, 310-437-0045
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