-New Home Orders up 36% Year-Over-Year on
a 9% Increase in Average Selling
Communities--Backlog Dollar Value up 56% on a 32%
increase in Backlog Units--Reports Net Income
Available to Common Stockholders of $72.3 Million, or $0.48 per
Diluted Share--Reports $68.2 Million of Land and
Lot Revenue and $56.2 Million in Land and Lot Gross
Margin-
TRI Pointe Group, Inc. (the "Company") (NYSE:TPH) today announced
results for the third quarter ended September 30, 2017.
Results and Operational Data for Third
Quarter 2017 and Comparisons to Third Quarter 2016
- Net income available to common stockholders was $72.3 million,
or $0.48 per diluted share, compared to $34.8 million, or $0.22 per
diluted share
- New home orders of 1,268 compared to 932, an increase of
36%
- Active selling communities averaged 129.8 compared to 119.0, an
increase of 9%
- New home orders per average selling community were 9.8 orders
(3.3 monthly) compared to 7.8 orders (2.6 monthly)
- Cancellation rate of 15% compared to 17%, a decrease of 200
basis points
- Backlog units at quarter end of 2,265 homes compared to 1,711,
an increase of 32%
- Dollar value of backlog at quarter end of $1.5 billion compared
to $950.2 million, an increase of 56%
- Average sales price in backlog at quarter end of $654,000
compared to $555,000, an increase of 18%
- Home sales revenue of $648.6 million compared to $578.7
million, an increase of 12%
- New home deliveries of 1,111 homes compared to 1,019 homes, an
increase of 9%
- Average sales price of homes delivered of $584,000 compared to
$568,000, an increase of 3%
- Homebuilding gross margin percentage of 19.5% compared to
20.1%, a decrease of 60 basis points
- Excluding interest and impairments and lot option abandonments,
adjusted homebuilding gross margin percentage was 22.0%*
- Land and lot sales revenue of $68.2 million compared to $2.5
million
- Land and lot sales gross margin percentage of 82.4% compared to
31.6%
- Third quarter 2017 results include the sale of a parcel
consisting of 69 homebuilding lots located in the Pacific Highlands
Ranch community in San Diego, California, representing $66.8
million in land and lot sales revenue and $56.1 million in land and
lot gross margin
- SG&A expense as a percentage of homes sales revenue of
10.2% compared to 10.9%, a decrease of 70 basis points
- Ratios of debt-to-capital and net debt-to-net capital of 47.5%
and 45.0%*, respectively, as of September 30, 2017
- Repurchased 975,700 shares of common stock at a weighted
average price per share of $12.83 for an aggregate dollar amount of
$12,519,904 in the three months ended September 30, 2017
- Ended third quarter of 2017 with total liquidity of $554.6
million, including cash of $162.4 million and $392.2 million of
availability under the Company's unsecured revolving credit
facility
* See "Reconciliation of Non-GAAP Financial Measures"
“I am very pleased with our results this quarter,” said TRI
Pointe Group Chief Executive Officer Doug Bauer. “We had a
36% increase in new home orders on a year-over-year basis, driven
primarily by a 9% increase in average selling communities and a 27%
increase in our monthly absorption rate. We believe this
order growth is a strong indicator of the strength in the housing
market and the quality of our home offerings. The positive
trends we saw for the quarter were broad-based, with our operations
in California continuing to produce excellent results and
operations in our other markets making improvements with respect to
order growth and/or profitability. These trends, coupled with
the significant increase to our quarter-ending backlog, put us in a
great position to end the year on a high note and carry that
momentum into 2018.”
Third Quarter 2017 Operating
Results
Net income available to common stockholders was $72.3 million,
or $0.48 per diluted share in the third quarter of 2017, compared
to net income available to common stockholders of $34.8 million, or
$0.22 per diluted share for the third quarter of
2016. The increase in net income available to common
stockholders was primarily due to an increase in land and lot sales
gross margin of $55.4 million due primarily to the sale of a parcel
consisting of 69 homebuilding lots located in the Pacific Highlands
Ranch community in San Diego, California.
Home sales revenue increased $70.0 million, or 12%, to $648.6
million for the third quarter of 2017, as compared to $578.7
million for the third quarter of 2016. The increase was
primarily attributable to a 9% increase in new home deliveries to
1,111, and a 3% increase in the average sales price of homes
delivered to $584,000, compared to $568,000 in the third quarter of
2016.
New home orders increased 36% to 1,268 homes for the third
quarter of 2017, as compared to 932 homes for the same period in
2016. Average selling communities increased 9% to 129.8
for the third quarter of 2017 compared to 119.0 for the third
quarter of 2016. The Company’s overall absorption rate per
average selling community increased 27% for the third quarter of
2017 to 9.8 orders (3.3 monthly) compared to 7.8 orders (2.6
monthly) during the third quarter of 2016.
The Company ended the quarter with 2,265 homes in backlog,
representing approximately $1.5 billion. The average sales price of
homes in backlog as of September 30, 2017 increased $99,000,
or 18%, to $654,000, compared to $555,000 as of September 30,
2016.
Homebuilding gross margin percentage for the third quarter of
2017 decreased to 19.5%, compared to 20.1% for the third quarter of
2016. Excluding interest and impairments and lot option
abandonments in cost of home sales, adjusted homebuilding gross
margin percentage was 22.0%* for the third quarter of 2017,
compared to 22.7%* for the third quarter of 2016. The
decrease in homebuilding gross margin percentage was largely due to
the mix of homes delivered and increased labor and material
cost.
Selling, general and administrative ("SG&A") expense for the
third quarter of 2017 decreased to 10.2% of home sales revenue as
compared to 10.9% for the third quarter of 2016 primarily due to
increased leverage as a result of a 12% increase in home sales
revenue.
“Our homebuilding teams did an excellent job of executing this
quarter, as we once again met or exceeded our quarterly guidance
for deliveries, average sales prices and homebuilding gross
margin,” said TRI Pointe Group President and Chief Operating
Officer Tom Mitchell. “In addition, we continue to be
encouraged by the quality of our land pipeline and the improvement
in both our operations and product. I would especially like
to thank and applaud our team in Houston for displaying such
dedication, perseverance and compassion for the community in the
wake of Hurricane Harvey and its aftermath. Our team members
really came together to help one another and to make sure our
communities were safe and back open for business.”
* See “Reconciliation of Non-GAAP Financial Measures”
Outlook
For the fourth quarter of 2017, the Company expects to open 14
new communities, and close out of 10, resulting in 131 active
selling communities as of December 31, 2017. In
addition, the Company anticipates delivering approximately 75% to
80% of its 2,265 units in backlog as of September 30, 2017 at an
average sales price of $630,000 to $640,000. The Company
anticipates its homebuilding gross margin percentage to be in a
range of 21.0% to 22.0% for the fourth quarter resulting in a range
of 20.0% to 21.0% for the full year. Finally, the Company
expects its SG&A expense as a percentage of home sales revenue
to be in the range of 7.6% to 7.8% for the fourth quarter and 10.2%
to 10.4% for the full year.
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, October 25, 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 Third 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 #13671772. 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, and the
risk of delays, reduced consumer demand, and shortages and price
increases in labor or materials associated with such 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.
Investor Relations Contact:
Chris Martin, TRI Pointe GroupDrew Mackintosh,
Mackintosh Investor RelationsInvestorRelations@TRIPointeGroup.com,
949-478-8696
Media Contact:Carol Ruiz,
cruiz@newgroundco.com, 310-437-0045
| KEY OPERATIONS AND FINANCIAL
DATA(dollars in thousands)(unaudited) |
|
|
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
2017 |
|
2016 |
|
Change |
|
2017 |
|
2016 |
|
Change |
| Operating Data: |
|
|
|
|
|
|
|
|
|
|
|
| Home
sales revenue |
$ |
648,638 |
|
|
$ |
578,653 |
|
|
$ |
69,985 |
|
|
$ |
1,609,458 |
|
|
$ |
1,558,633 |
|
|
$ |
50,825 |
|
|
Homebuilding gross margin |
$ |
126,720 |
|
|
$ |
116,330 |
|
|
$ |
10,390 |
|
|
$ |
314,895 |
|
|
$ |
339,073 |
|
|
$ |
(24,178 |
) |
|
Homebuilding gross margin % |
19.5 |
% |
|
20.1 |
% |
|
(0.6 |
)% |
|
19.6 |
% |
|
21.8 |
% |
|
(2.2 |
)% |
| Adjusted
homebuilding gross margin %* |
22.0 |
% |
|
22.7 |
% |
|
(0.7 |
)% |
|
22.0 |
% |
|
24.0 |
% |
|
(2.0 |
)% |
| Land and
lot sales revenue |
$ |
68,218 |
|
|
$ |
2,535 |
|
|
$ |
65,683 |
|
|
$ |
69,661 |
|
|
$ |
70,204 |
|
|
$ |
(543 |
) |
| Land and
lot gross margin |
$ |
56,217 |
|
|
$ |
801 |
|
|
$ |
55,416 |
|
|
$ |
56,362 |
|
|
$ |
53,231 |
|
|
$ |
3,131 |
|
| Land and
lot gross margin % |
82.4 |
% |
|
31.6 |
% |
|
50.8 |
% |
|
80.9 |
% |
|
75.8 |
% |
|
5.1 |
% |
| SG&A
expense |
$ |
66,135 |
|
|
$ |
63,130 |
|
|
$ |
3,005 |
|
|
$ |
193,502 |
|
|
$ |
180,914 |
|
|
$ |
12,588 |
|
|
SG&A expense as a % of home sales revenue |
10.2 |
% |
|
10.9 |
% |
|
(0.7 |
)% |
|
12.0 |
% |
|
11.6 |
% |
|
0.4 |
% |
| Net
income available to common stockholders |
$ |
72,264 |
|
|
$ |
34,834 |
|
|
$ |
37,430 |
|
|
$ |
113,171 |
|
|
$ |
137,310 |
|
|
$ |
(24,139 |
) |
| Adjusted
EBITDA* |
$ |
139,550 |
|
|
$ |
74,215 |
|
|
$ |
65,335 |
|
|
$ |
237,755 |
|
|
$ |
262,945 |
|
|
$ |
(25,190 |
) |
| Interest
incurred |
$ |
22,865 |
|
|
$ |
18,601 |
|
|
$ |
4,264 |
|
|
$ |
61,669 |
|
|
$ |
50,030 |
|
|
$ |
11,639 |
|
| Interest
in cost of home sales |
$ |
15,623 |
|
|
$ |
14,385 |
|
|
$ |
1,238 |
|
|
$ |
38,448 |
|
|
$ |
34,653 |
|
|
$ |
3,795 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| Other Data: |
|
|
|
|
|
|
|
|
|
|
|
| Net new
home orders |
1,268 |
|
|
932 |
|
|
336 |
|
|
4,012 |
|
|
3,339 |
|
|
673 |
|
| New homes
delivered |
1,111 |
|
|
1,019 |
|
|
92 |
|
|
2,940 |
|
|
2,784 |
|
|
156 |
|
| Average
selling price of homes delivered |
$ |
584 |
|
|
$ |
568 |
|
|
$ |
16 |
|
|
$ |
547 |
|
|
$ |
560 |
|
|
$ |
(13 |
) |
| Average
selling communities |
129.8 |
|
|
119.0 |
|
|
10.8 |
|
|
127.4 |
|
|
117.0 |
|
|
10.4 |
|
| Selling
communities at end of period |
127 |
|
|
123 |
|
|
4 |
|
|
|
N/A |
|
|
|
N/A |
|
|
|
N/A |
|
|
Cancellation rate |
15 |
% |
|
17 |
% |
|
(2 |
)% |
|
15 |
% |
|
14 |
% |
|
1 |
% |
| Backlog
(estimated dollar value) |
$ |
1,482,265 |
|
|
$ |
950,171 |
|
|
$ |
532,094 |
|
|
|
|
|
|
|
| Backlog
(homes) |
2,265 |
|
|
1,711 |
|
|
554 |
|
|
|
|
|
|
|
| Average
selling price in backlog |
$ |
654 |
|
|
$ |
555 |
|
|
$ |
99 |
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
September 30, |
|
December 31, |
|
|
| |
|
|
|
|
|
|
2017 |
|
2016 |
|
Change |
| Balance Sheet
Data: |
|
|
|
|
|
|
|
|
|
|
|
| Cash and
cash equivalents |
|
|
|
|
|
|
$ |
162,396 |
|
|
$ |
208,657 |
|
|
$ |
(46,261 |
) |
| Real
estate inventories |
|
|
|
|
|
|
$ |
3,303,421 |
|
|
$ |
2,910,627 |
|
|
$ |
392,794 |
|
| Lots
owned or controlled |
|
|
|
|
|
|
27,892 |
|
|
28,309 |
|
|
(417 |
) |
| Homes
under construction (1) |
|
|
|
|
|
|
2,599 |
|
|
1,605 |
|
|
994 |
|
| Homes
completed, unsold |
|
|
|
|
|
|
243 |
|
|
405 |
|
|
(162 |
) |
| Debt |
|
|
|
|
|
|
$ |
1,669,558 |
|
|
$ |
1,382,033 |
|
|
$ |
287,525 |
|
|
Stockholders' equity |
|
|
|
|
|
|
$ |
1,842,429 |
|
|
$ |
1,829,447 |
|
|
$ |
12,982 |
|
| Book
capitalization |
|
|
|
|
|
|
$ |
3,511,987 |
|
|
$ |
3,211,480 |
|
|
$ |
300,507 |
|
| Ratio of
debt-to-capital |
|
|
|
|
|
|
47.5 |
% |
|
43.0 |
% |
|
4.5 |
% |
| Ratio of
net debt-to-net capital* |
|
|
|
|
|
|
45.0 |
% |
|
39.1 |
% |
|
5.9 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
__________(1) Homes under construction included 64 and 65 models
at September 30, 2017 and December 31, 2016,
respectively.* See “Reconciliation of Non-GAAP Financial
Measures”
| CONSOLIDATED BALANCE SHEETS(in
thousands, except share amounts) |
| |
| |
September 30, |
|
December 31, |
| |
2017 |
|
2016 |
|
Assets |
(unaudited) |
|
|
| Cash and
cash equivalents |
$ |
162,396 |
|
|
$ |
208,657 |
|
|
Receivables |
84,583 |
|
|
82,500 |
|
| Real
estate inventories |
3,303,421 |
|
|
2,910,627 |
|
|
Investments in unconsolidated entities |
17,616 |
|
|
17,546 |
|
| Goodwill
and other intangible assets, net |
161,094 |
|
|
161,495 |
|
| Deferred
tax assets, net |
108,664 |
|
|
123,223 |
|
| Other
assets |
58,292 |
|
|
60,592 |
|
| Total
assets |
$ |
3,896,066 |
|
|
$ |
3,564,640 |
|
| |
|
|
|
|
Liabilities |
|
|
|
| Accounts
payable |
$ |
64,038 |
|
|
$ |
70,252 |
|
| Accrued
expenses and other liabilities |
316,487 |
|
|
263,845 |
|
| Unsecured
revolving credit facility |
200,000 |
|
|
200,000 |
|
| Seller
financed loans |
— |
|
|
13,726 |
|
| Senior
notes |
1,469,558 |
|
|
1,168,307 |
|
| Total
liabilities |
2,050,083 |
|
|
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 September 30, 2017 and
December 31, 2016, respectively |
— |
|
|
— |
|
| Common
stock, $0.01 par value, 500,000,000 shares authorized;
150,429,021 and 158,626,229 shares issued and outstanding at
September 30, 2017 and December 31, 2016, respectively |
1,504 |
|
|
1,586 |
|
|
Additional paid-in capital |
780,715 |
|
|
880,822 |
|
| Retained
earnings |
1,060,210 |
|
|
947,039 |
|
| Total
stockholders' equity |
1,842,429 |
|
|
1,829,447 |
|
|
Noncontrolling interests |
3,554 |
|
|
19,063 |
|
| Total
equity |
1,845,983 |
|
|
1,848,510 |
|
| Total
liabilities and equity |
$ |
3,896,066 |
|
|
$ |
3,564,640 |
|
|
|
|
|
|
|
|
|
|
| CONSOLIDATED STATEMENT OF
OPERATIONS(in thousands, except share and per share
amounts)(unaudited) |
|
|
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
|
Homebuilding: |
|
|
|
|
|
|
|
| Home
sales revenue |
$ |
648,638 |
|
|
$ |
578,653 |
|
|
$ |
1,609,458 |
|
|
$ |
1,558,633 |
|
| Land and
lot sales revenue |
68,218 |
|
|
2,535 |
|
|
69,661 |
|
|
70,204 |
|
| Other
operations revenue |
584 |
|
|
606 |
|
|
1,752 |
|
|
1,790 |
|
| Total
revenues |
717,440 |
|
|
581,794 |
|
|
1,680,871 |
|
|
1,630,627 |
|
| Cost of
home sales |
521,918 |
|
|
462,323 |
|
|
1,294,563 |
|
|
1,219,560 |
|
| Cost of
land and lot sales |
12,001 |
|
|
1,734 |
|
|
13,299 |
|
|
16,973 |
|
| Other
operations expense |
575 |
|
|
575 |
|
|
1,726 |
|
|
1,724 |
|
| Sales and
marketing |
33,179 |
|
|
31,852 |
|
|
92,209 |
|
|
90,621 |
|
| General
and administrative |
32,956 |
|
|
31,278 |
|
|
101,293 |
|
|
90,293 |
|
|
Homebuilding income from operations |
116,811 |
|
|
54,032 |
|
|
177,781 |
|
|
211,456 |
|
| Equity in
(loss) income of unconsolidated entities |
— |
|
|
(20 |
) |
|
1,646 |
|
|
181 |
|
| Other
income, net |
26 |
|
|
21 |
|
|
147 |
|
|
287 |
|
|
Homebuilding income before income taxes |
116,837 |
|
|
54,033 |
|
|
179,574 |
|
|
211,924 |
|
| Financial
Services: |
|
|
|
|
|
|
|
|
Revenues |
295 |
|
|
235 |
|
|
881 |
|
|
762 |
|
|
Expenses |
82 |
|
|
72 |
|
|
233 |
|
|
183 |
|
| Equity in
income of unconsolidated entities |
1,351 |
|
|
1,247 |
|
|
2,911 |
|
|
3,246 |
|
| Financial
services income before income taxes |
1,564 |
|
|
1,410 |
|
|
3,559 |
|
|
3,825 |
|
| Income before
income taxes |
118,401 |
|
|
55,443 |
|
|
183,133 |
|
|
215,749 |
|
| Provision for income
taxes |
(46,112 |
) |
|
(20,298 |
) |
|
(69,824 |
) |
|
(77,701 |
) |
| Net income |
72,289 |
|
|
35,145 |
|
|
113,309 |
|
|
138,048 |
|
| Net income attributable
to noncontrolling interests |
(25 |
) |
|
(311 |
) |
|
(138 |
) |
|
(738 |
) |
| Net income available to
common stockholders |
$ |
72,264 |
|
|
$ |
34,834 |
|
|
$ |
113,171 |
|
|
$ |
137,310 |
|
| Earnings per share |
|
|
|
|
|
|
|
|
Basic |
$ |
0.48 |
|
|
$ |
0.22 |
|
|
$ |
0.73 |
|
|
$ |
0.85 |
|
|
Diluted |
$ |
0.48 |
|
|
$ |
0.22 |
|
|
$ |
0.73 |
|
|
$ |
0.85 |
|
| Weighted average shares
outstanding |
|
|
|
|
|
|
|
|
Basic |
151,214,744 |
|
|
160,614,055 |
|
|
155,238,206 |
|
|
161,456,520 |
|
|
Diluted |
152,129,825 |
|
|
161,267,509 |
|
|
155,936,076 |
|
|
161,916,352 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| MARKET DATA BY REPORTING SEGMENT &
STATE(dollars in thousands)(unaudited) |
|
|
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
| |
NewHomesDelivered |
|
AverageSalesPrice |
|
NewHomesDelivered |
|
AverageSalesPrice |
|
NewHomesDelivered |
|
AverageSalesPrice |
|
NewHomesDelivered |
|
AverageSalesPrice |
| New Homes
Delivered: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Maracay
Homes |
164 |
|
|
$ |
477 |
|
|
165 |
|
|
$ |
412 |
|
|
447 |
|
|
$ |
459 |
|
|
400 |
|
|
$ |
403 |
|
| Pardee
Homes |
328 |
|
|
502 |
|
|
302 |
|
|
623 |
|
|
896 |
|
|
478 |
|
|
828 |
|
|
587 |
|
|
Quadrant Homes |
79 |
|
|
686 |
|
|
90 |
|
|
531 |
|
|
206 |
|
|
649 |
|
|
287 |
|
|
515 |
|
|
Trendmaker Homes |
104 |
|
|
504 |
|
|
121 |
|
|
516 |
|
|
343 |
|
|
493 |
|
|
335 |
|
|
506 |
|
|
TRI Pointe Homes |
332 |
|
|
720 |
|
|
260 |
|
|
645 |
|
|
783 |
|
|
669 |
|
|
678 |
|
|
667 |
|
|
Winchester Homes |
104 |
|
|
579 |
|
|
81 |
|
|
550 |
|
|
265 |
|
|
561 |
|
|
256 |
|
|
554 |
|
| Total |
1,111 |
|
|
$ |
584 |
|
|
1,019 |
|
|
$ |
568 |
|
|
2,940 |
|
|
$ |
547 |
|
|
2,784 |
|
|
$ |
560 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended September 30, |
|
Nine Months Ended September 30, |
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
| |
NewHomesDelivered |
|
AverageSalesPrice |
|
NewHomesDelivered |
|
AverageSalesPrice |
|
NewHomesDelivered |
|
AverageSalesPrice |
|
NewHomesDelivered |
|
AverageSalesPrice |
| New Homes
Delivered: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
California |
535 |
|
|
$ |
640 |
|
|
412 |
|
|
$ |
716 |
|
|
1,272 |
|
|
$ |
603 |
|
|
1,093 |
|
|
$ |
707 |
|
|
Colorado |
30 |
|
|
591 |
|
|
30 |
|
|
526 |
|
|
97 |
|
|
593 |
|
|
118 |
|
|
505 |
|
|
Maryland |
77 |
|
|
562 |
|
|
55 |
|
|
510 |
|
|
192 |
|
|
534 |
|
|
169 |
|
|
504 |
|
|
Virginia |
27 |
|
|
625 |
|
|
26 |
|
|
634 |
|
|
73 |
|
|
633 |
|
|
87 |
|
|
650 |
|
|
Arizona |
164 |
|
|
477 |
|
|
165 |
|
|
412 |
|
|
447 |
|
|
459 |
|
|
400 |
|
|
403 |
|
|
Nevada |
95 |
|
|
458 |
|
|
120 |
|
|
377 |
|
|
310 |
|
|
414 |
|
|
295 |
|
|
360 |
|
|
Texas |
104 |
|
|
504 |
|
|
121 |
|
|
516 |
|
|
343 |
|
|
493 |
|
|
335 |
|
|
506 |
|
|
Washington |
79 |
|
|
686 |
|
|
90 |
|
|
531 |
|
|
206 |
|
|
649 |
|
|
287 |
|
|
515 |
|
| Total |
1,111 |
|
|
$ |
584 |
|
|
1,019 |
|
|
$ |
568 |
|
|
2,940 |
|
|
$ |
547 |
|
|
2,784 |
|
|
$ |
560 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| MARKET DATA BY REPORTING SEGMENT & STATE,
continued(unaudited) |
|
|
| |
Three Months Ended September 30, |
|
Nine Months Ended September 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 |
158 |
|
|
13.5 |
|
|
134 |
|
|
17.8 |
|
|
504 |
|
|
15.3 |
|
|
526 |
|
|
18.1 |
|
| Pardee
Homes |
421 |
|
|
30.8 |
|
|
283 |
|
|
22.5 |
|
|
1,282 |
|
|
29.3 |
|
|
936 |
|
|
22.8 |
|
|
Quadrant Homes |
84 |
|
|
8.3 |
|
|
49 |
|
|
7.3 |
|
|
311 |
|
|
7.6 |
|
|
274 |
|
|
8.5 |
|
|
Trendmaker Homes |
113 |
|
|
29.3 |
|
|
130 |
|
|
29.0 |
|
|
393 |
|
|
30.9 |
|
|
385 |
|
|
26.8 |
|
|
TRI Pointe Homes |
378 |
|
|
34.7 |
|
|
239 |
|
|
28.7 |
|
|
1,144 |
|
|
31.9 |
|
|
883 |
|
|
27.3 |
|
|
Winchester Homes |
114 |
|
|
13.2 |
|
|
97 |
|
|
13.7 |
|
|
378 |
|
|
12.4 |
|
|
335 |
|
|
13.5 |
|
| Total |
1,268 |
|
|
129.8 |
|
|
932 |
|
|
119.0 |
|
|
4,012 |
|
|
127.4 |
|
|
3,339 |
|
|
117.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Three Months Ended September 30, |
|
Nine Months Ended September 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 |
632 |
|
|
45.2 |
|
|
380 |
|
|
35.0 |
|
|
1,885 |
|
|
43.1 |
|
|
1,333 |
|
|
34.3 |
|
|
Colorado |
40 |
|
|
8.0 |
|
|
31 |
|
|
5.0 |
|
|
144 |
|
|
6.5 |
|
|
107 |
|
|
4.8 |
|
|
Maryland |
81 |
|
|
10.0 |
|
|
72 |
|
|
7.2 |
|
|
265 |
|
|
9.0 |
|
|
214 |
|
|
6.7 |
|
|
Virginia |
33 |
|
|
3.2 |
|
|
25 |
|
|
6.5 |
|
|
113 |
|
|
3.4 |
|
|
121 |
|
|
6.8 |
|
|
Arizona |
158 |
|
|
13.5 |
|
|
134 |
|
|
17.8 |
|
|
504 |
|
|
15.3 |
|
|
526 |
|
|
18.1 |
|
|
Nevada |
127 |
|
|
12.3 |
|
|
111 |
|
|
11.2 |
|
|
397 |
|
|
11.6 |
|
|
379 |
|
|
11.0 |
|
|
Texas |
113 |
|
|
29.3 |
|
|
130 |
|
|
29.0 |
|
|
393 |
|
|
30.9 |
|
|
385 |
|
|
26.8 |
|
|
Washington |
84 |
|
|
8.3 |
|
|
49 |
|
|
7.3 |
|
|
311 |
|
|
7.6 |
|
|
274 |
|
|
8.5 |
|
| Total |
1,268 |
|
|
129.8 |
|
|
932 |
|
|
119.0 |
|
|
4,012 |
|
|
127.4 |
|
|
3,339 |
|
|
117.0 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| MARKET DATA BY REPORTING SEGMENT & STATE,
continued(dollars in thousands)(unaudited) |
|
|
| |
As of September 30, 2017 |
|
As of September 30, 2016 |
| |
Backlog Units |
|
Backlog Dollar Value |
|
Average Sales Price |
|
Backlog Units |
|
Backlog Dollar Value |
|
Average Sales Price |
|
Backlog: |
|
|
|
|
|
|
|
|
|
|
|
| Maracay
Homes |
305 |
|
|
$ |
154,324 |
|
|
$ |
506 |
|
|
329 |
|
|
$ |
144,127 |
|
|
$ |
438 |
|
| Pardee
Homes |
646 |
|
|
436,376 |
|
|
676 |
|
|
382 |
|
|
182,263 |
|
|
477 |
|
| Quadrant
Homes |
206 |
|
|
160,202 |
|
|
778 |
|
|
130 |
|
|
83,467 |
|
|
642 |
|
|
Trendmaker Homes |
213 |
|
|
107,968 |
|
|
507 |
|
|
186 |
|
|
98,874 |
|
|
532 |
|
| TRI
Pointe Homes |
659 |
|
|
481,537 |
|
|
731 |
|
|
495 |
|
|
319,823 |
|
|
646 |
|
|
Winchester Homes |
236 |
|
|
141,858 |
|
|
601 |
|
|
189 |
|
|
121,617 |
|
|
643 |
|
|
Total |
2,265 |
|
|
$ |
1,482,265 |
|
|
$ |
654 |
|
|
1,711 |
|
|
$ |
950,171 |
|
|
$ |
555 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
|
|
|
|
|
|
|
|
| |
As of September 30, 2017 |
|
As of September 30, 2016 |
| |
Backlog Units |
|
Backlog Dollar Value |
|
Average Sales Price |
|
Backlog Units |
|
Backlog Dollar Value |
|
Average Sales Price |
|
Backlog: |
|
|
|
|
|
|
|
|
|
|
|
|
California |
1,015 |
|
|
$ |
750,947 |
|
|
$ |
740 |
|
|
641 |
|
|
$ |
387,125 |
|
|
$ |
604 |
|
|
Colorado |
106 |
|
|
65,563 |
|
|
619 |
|
|
73 |
|
|
42,809 |
|
|
586 |
|
|
Maryland |
175 |
|
|
98,920 |
|
|
565 |
|
|
122 |
|
|
75,444 |
|
|
618 |
|
|
Virginia |
61 |
|
|
42,937 |
|
|
704 |
|
|
67 |
|
|
46,172 |
|
|
689 |
|
|
Arizona |
305 |
|
|
154,324 |
|
|
506 |
|
|
329 |
|
|
144,127 |
|
|
438 |
|
|
Nevada |
184 |
|
|
101,404 |
|
|
551 |
|
|
163 |
|
|
72,153 |
|
|
443 |
|
|
Texas |
213 |
|
|
107,968 |
|
|
507 |
|
|
186 |
|
|
98,874 |
|
|
532 |
|
|
Washington |
206 |
|
|
160,202 |
|
|
778 |
|
|
130 |
|
|
83,467 |
|
|
642 |
|
| Total |
2,265 |
|
|
$ |
1,482,265 |
|
|
$ |
654 |
|
|
1,711 |
|
|
$ |
950,171 |
|
|
$ |
555 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| MARKET DATA BY REPORTING SEGMENT & STATE,
continued(unaudited) |
| |
| |
September 30, |
|
December 31, |
| |
2017 |
|
2016 |
| Lots Owned or
Controlled: |
|
|
|
| Maracay
Homes |
2,606 |
|
|
2,053 |
|
| Pardee
Homes |
15,655 |
|
|
16,912 |
|
| Quadrant
Homes |
1,685 |
|
|
1,582 |
|
|
Trendmaker Homes |
1,856 |
|
|
1,999 |
|
| TRI
Pointe Homes |
3,784 |
|
|
3,479 |
|
|
Winchester Homes |
2,306 |
|
|
2,284 |
|
| Total |
27,892 |
|
|
28,309 |
|
| |
|
|
|
| |
|
|
|
| |
September 30, |
|
December 31, |
| |
2017 |
|
2016 |
| Lots Owned or
Controlled: |
|
|
|
|
California |
16,403 |
|
|
17,245 |
|
|
Colorado |
817 |
|
|
918 |
|
|
Maryland |
1,661 |
|
|
1,779 |
|
|
Virginia |
645 |
|
|
505 |
|
|
Arizona |
2,606 |
|
|
2,053 |
|
|
Nevada |
2,219 |
|
|
2,228 |
|
|
Texas |
1,856 |
|
|
1,999 |
|
|
Washington |
1,685 |
|
|
1,582 |
|
| Total |
27,892 |
|
|
28,309 |
|
| |
|
|
|
| |
|
|
|
| |
September 30, |
|
December 31, |
| |
2017 |
|
2016 |
| Lots by
Ownership Type: |
|
|
|
| Lots
owned |
24,803 |
|
|
25,283 |
|
| Lots
controlled (1) |
3,089 |
|
|
3,026 |
|
| Total |
27,892 |
|
|
28,309 |
|
| |
|
|
|
|
|
__________(1) As of September 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 September 30, |
| |
2017 |
|
% |
|
2016 |
|
% |
| |
(dollars in thousands) |
| Home sales revenue |
$ |
648,638 |
|
|
100.0 |
% |
|
$ |
578,653 |
|
|
100.0 |
% |
| Cost of home sales |
521,918 |
|
|
80.5 |
% |
|
462,323 |
|
|
79.9 |
% |
| Homebuilding gross
margin |
126,720 |
|
|
19.5 |
% |
|
116,330 |
|
|
20.1 |
% |
|
Add: interest in cost of home sales |
15,623 |
|
|
2.4 |
% |
|
14,385 |
|
|
2.5 |
% |
|
Add: impairments and lot option abandonments |
374 |
|
|
0.1 |
% |
|
389 |
|
|
0.1 |
% |
| Adjusted homebuilding
gross margin |
$ |
142,717 |
|
|
22.0 |
% |
|
$ |
131,104 |
|
|
22.7 |
% |
| Homebuilding gross
margin percentage |
19.5 |
% |
|
|
|
20.1 |
% |
|
|
| Adjusted homebuilding
gross margin percentage |
22.0 |
% |
|
|
|
22.7 |
% |
|
|
| |
|
|
|
|
|
|
|
|
|
| |
Nine Months Ended September 30, |
| |
2017 |
|
% |
|
2016 |
|
% |
| |
(dollars in thousands) |
| Home sales revenue |
$ |
1,609,458 |
|
|
100.0 |
% |
|
$ |
1,558,633 |
|
|
100.0 |
% |
| Cost of home sales |
1,294,563 |
|
|
80.4 |
% |
|
1,219,560 |
|
|
78.2 |
% |
| Homebuilding gross
margin |
314,895 |
|
|
19.6 |
% |
|
339,073 |
|
|
21.8 |
% |
|
Add: interest in cost of home sales |
38,448 |
|
|
2.4 |
% |
|
34,653 |
|
|
2.2 |
% |
|
Add: impairments and lot option abandonments |
1,169 |
|
|
0.1 |
% |
|
678 |
|
|
0.0 |
% |
| Adjusted homebuilding
gross margin |
$ |
354,512 |
|
|
22.0 |
% |
|
$ |
374,404 |
|
|
24.0 |
% |
| Homebuilding gross
margin percentage |
19.6 |
% |
|
|
|
21.8 |
% |
|
|
| Adjusted homebuilding
gross margin percentage |
22.0 |
% |
|
|
|
24.0 |
% |
|
|
| |
|
|
|
|
|
|
|
|
|
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.
| |
September 30, 2017 |
|
December 31, 2016 |
| Unsecured revolving
credit facility |
$ |
200,000 |
|
|
$ |
200,000 |
|
| Seller financed
loans |
— |
|
|
13,726 |
|
| Senior notes |
1,469,558 |
|
|
1,168,307 |
|
| Total
debt |
1,669,558 |
|
|
1,382,033 |
|
| Stockholders’
equity |
1,842,429 |
|
|
1,829,447 |
|
| Total
capital |
$ |
3,511,987 |
|
|
$ |
3,211,480 |
|
| Ratio of
debt-to-capital(1) |
47.5 |
% |
|
43.0 |
% |
| |
|
|
|
| Total debt |
$ |
1,669,558 |
|
|
$ |
1,382,033 |
|
| Less: Cash and cash
equivalents |
(162,396 |
) |
|
(208,657 |
) |
| Net
debt |
1,507,162 |
|
|
1,173,376 |
|
| Stockholders’
equity |
1,842,429 |
|
|
1,829,447 |
|
| Net
capital |
$ |
3,349,591 |
|
|
$ |
3,002,823 |
|
| Ratio of net
debt-to-net capital(2) |
45.0 |
% |
|
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 September
30, |
|
Nine Months Ended September
30, |
| |
2017 |
|
2016 |
|
2017 |
|
2016 |
| |
(in thousands) |
| Net income available to
common stockholders |
$ |
72,264 |
|
|
$ |
34,834 |
|
|
$ |
113,171 |
|
|
$ |
137,310 |
|
| Interest
expense: |
|
|
|
|
|
|
|
| Interest
incurred |
22,865 |
|
|
18,601 |
|
|
61,669 |
|
|
50,030 |
|
| Interest
capitalized |
(22,865 |
) |
|
(18,601 |
) |
|
(61,669 |
) |
|
(50,030 |
) |
|
Amortization of interest in cost of sales |
15,899 |
|
|
14,415 |
|
|
38,771 |
|
|
34,808 |
|
| Provision
for income taxes |
46,112 |
|
|
20,298 |
|
|
69,824 |
|
|
77,701 |
|
|
Depreciation and amortization |
867 |
|
|
866 |
|
|
2,567 |
|
|
2,322 |
|
|
Amortization of stock-based compensation
|
3,887 |
|
|
3,285 |
|
|
11,631 |
|
|
9,648 |
|
| EBITDA |
139,029 |
|
|
73,698 |
|
|
235,964 |
|
|
261,789 |
|
|
Impairments and lot abandonments |
374 |
|
|
389 |
|
|
1,203 |
|
|
678 |
|
|
Restructuring charges |
147 |
|
|
128 |
|
|
588 |
|
|
478 |
|
| Adjusted EBITDA |
$ |
139,550 |
|
|
$ |
74,215 |
|
|
$ |
237,755 |
|
|
$ |
262,945 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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