Tri Pointe Homes, Inc. Reports 2021 Second Quarter Results and Announces $250 Million Increase to Its Stock Repurchase Program
Tri Pointe Homes reported strong Q2 2021 results with net new home orders increasing by 22% year-over-year and backlog units up 53%. The company achieved a homebuilding gross margin of 24.6% and diluted EPS of $1.00, a 133% increase from Q2 2020. The Board approved an additional $250 million for share repurchases, raising the total to $500 million through December 2022. Tri Pointe expects continued growth, with forecasts of 1,450-1,550 home deliveries in Q3 2021.
- Net income increased by 109% year-over-year to $117.9 million.
- Home sales revenue rose 32% to $1.0 billion.
- Homebuilding gross margin percentage improved by 300 basis points to 24.6%.
- Share repurchase program authorization increased to $500 million.
- Quarterly backlog value grew by 50% to $2.5 billion.
- Active selling communities decreased by 21% to 114.5.
- Cancellation rate improved but remains at 7%, higher than industry norms.
-Net New Home Orders up
-Backlog Units up
-Backlog Dollar Value up
-Homebuilding Gross Margin Percentage of
-Diluted Earnings Per Share of
INCLINE VILLAGE, Nev., July 22, 2021 (GLOBE NEWSWIRE) -- Tri Pointe Homes, Inc. (the “Company”) (NYSE:TPH) today announced results for the second quarter ended June 30, 2021. The Company also announced that its Board of Directors has authorized the repurchase of up to an additional
“Tri Pointe Homes delivered another strong quarter of profitability in the second quarter of 2021, generating fully diluted earnings per share of
Mr. Bauer continued, “Order activity during the second quarter was robust as we averaged 4.7 sales per community per month, a
Mr. Bauer concluded, “With a favorable industry outlook, a sizable backlog and a rapidly improving return profile, Tri Pointe Homes is poised to continue the strong operating momentum into the back half of 2021. Longer term, we believe we have an excellent opportunity to build on our recent success, thanks to the increasing scale we are realizing in many of our markets and the land investments we have made, which will lead to significant community count growth in 2022. Given these positives, we are extremely optimistic about the future of our company.”
Results and Operational Data for Second Quarter 2021 and Comparisons to Second Quarter 2020
- Net income was
$117.9 million , or$1.00 per diluted share, compared to$56.5 million , or$0.43 per diluted share. - Home sales revenue of
$1.0 billion compared to$766.9 million , an increase of32% - New home deliveries of 1,545 homes compared to 1,229 homes, an increase of
26% - Average sales price of homes delivered of
$653,000 compared to$624,000 , an increase of5%
- New home deliveries of 1,545 homes compared to 1,229 homes, an increase of
- Homebuilding gross margin percentage of
24.6% compared to21.6% , an increase of 300 basis points- Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was
27.7% *
- Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was
- SG&A expense as a percentage of homes sales revenue of
9.6% compared to10.8% , a decrease of 120 basis points - Net new home orders of 1,622 compared to 1,332, an increase of
22% - Active selling communities averaged 114.5 compared to 144.3, a decrease of
21% - Net new home orders per average selling community were 14.2 orders (4.7 monthly) compared to 9.2 orders (3.1 monthly)
- Cancellation rate of
7% compared to21%
- Backlog units at quarter end of 3,902 homes compared to 2,558, an increase of
53% - Dollar value of backlog at quarter end of
$2.5 billion compared to$1.7 billion , an increase of50% - Average sales price of homes in backlog at quarter end of
$647,000 compared to$656,000 , a decrease of1%
- Dollar value of backlog at quarter end of
- Ratios of debt-to-capital and net debt-to-net capital of
37.1% and25.7% *, respectively, as of June 30, 2021 - Repurchased 3,666,676 shares of common stock at a weighted average price per share of
$22.60 for an aggregate dollar amount of$82.9 million in the three months ended June 30, 2021 - Extended maximum amount of revolving credit facility from
$600 million to$650 million and extended the maturity date of both the revolving credit facility and term loan facility to June 2026† - Ended the second quarter of 2021 with total liquidity of
$1.2 billion , including cash and cash equivalents of$556.5 million and$593.1 million of availability under the Company’s unsecured revolving credit facility
* See “Reconciliation of Non-GAAP Financial Measures”
† The maturity date for
“At Tri Pointe, we understand that the housing market is constantly changing, and that in order to be successful, we must change along with it,” said Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “That is why we invest heavily in market research to keep our new home offerings fresh and maintain our premium lifestyle brand advantage. The same is true with how we leverage technology to improve our processes and reduce costs. Our results in the second quarter of 2021 are a testament to our ability to adapt and change in a market that has become increasingly difficult to navigate as a result of supply chain issues and labor and material shortages. We believe this is a competitive strength for our company, and one that will allow us to be successful as the housing market continues to evolve.”
Outlook
For the third quarter of 2021, the Company anticipates delivering between 1,450 and 1,550 homes at an average sales price between
For the full year, the Company expects to open approximately 70 new communities and end the year with between 120 and 130 active selling communities. In addition, the Company anticipates delivering between 6,000 and 6,300 homes at an average sales price between
Stock Repurchase Program
On July 21, 2021, the Company’s Board of Directors approved the repurchase of up to an additional
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 Thursday, July 22, 2021. The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer, and Glenn Keeler, Chief Financial Officer. Interested parties can listen to the call live and view the related slides on the Internet under the Events & Presentations heading in the Investors section of the Company’s website at www.TriPointeHomes.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 toll free at (877) 407-3982, or (201) 493-6780 for international participants. Participants should ask for the Tri Pointe Homes Second Quarter 2021 Earnings Conference Call. Those dialing in should do so at least ten minutes prior to the start of the call. A replay of the call will be available for two weeks following the call toll free at (844) 512-2921, or (412) 317-6671 for international participants, using the reference number 13721036. An archive of the webcast will also be available on the Company’s website for a limited time.
About Tri Pointe Homes, Inc.
One of the largest homebuilders in the U.S., Tri Pointe Homes® (NYSE: TPH) is a publicly traded company and a recognized leader in customer experience, innovative design, and environmentally responsible business practices. The company builds premium homes and communities in 10 states, with deep ties to the communities it serves—some for as long as a century. Tri Pointe Homes combines the financial resources, technology platforms and proven leadership of a national organization with the regional insights, longstanding community connections and agility of empowered local teams. Tri Pointe has won multiple Builder of the Year awards, most recently in 2019, and made Fortune magazine’s 2017 100 Fastest-Growing Companies list. Named one of the Best Places to Work by the Orange County Business Journal for four consecutive years, Tri Pointe Homes also became a Great Place to Work-CertifiedTM company in 2021. For more information, please visit TriPointeHomes.com.
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, but are not limited to, statements regarding our strategy, projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects, and capital spending. Forward-looking statements that are included in this press release are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “goal,” “guidance,” “intend,” “likely,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” 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 effects of the ongoing COVID-19 pandemic, which are highly uncertain and subject to rapid change, cannot be predicted and will depend upon future developments, including the emergence and spread of new strains or variants of COVID-19, the severity and the duration of the outbreak, the duration of existing and future social distancing and shelter-in-place orders, further mitigation strategies taken by applicable government authorities, the availability and acceptance of effective vaccines, adequate testing and treatments and the prevalence of widespread immunity to COVID-19; the impacts on our supply chain, the health of our employees, service providers and trade partners, and the reactions of U.S. and global markets and their effects on consumer confidence and spending; the effects 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; the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such parcels; access to adequate capital on acceptable terms; geographic concentration of our operations, particularly within California; levels of competition; the successful execution of our internal performance plans, including restructuring and cost reduction initiatives; raw material and labor prices and availability; oil and other energy prices; the effects of U.S. trade policies, including the imposition of tariffs and duties on homebuilding products and retaliatory measures taken by other countries; the effects of weather, including the 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; the risk of loss from acts of war, terrorism, civil unrest or outbreaks of contagious diseases, such as COVID-19; transportation costs; federal and state tax policies; the effects of land use, environment and other governmental laws and 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 homebuyers’ 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:
Drew Mackintosh, Mackintosh Investor Relations
InvestorRelations@TriPointeHomes.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 June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||||
| 2021 | 2020 | Change | % Change | 2021 | 2020 | Change | % Change | ||||||||||||||||||||||
| Operating Data: | (unaudited) | ||||||||||||||||||||||||||||
| Home sales revenue | $ | 1,009,307 | $ | 766,942 | $ | 242,365 | 32 | % | $ | 1,725,982 | $ | 1,361,780 | $ | 364,202 | 27 | % | |||||||||||||
| Homebuilding gross margin | $ | 248,092 | $ | 165,508 | $ | 82,584 | 50 | % | $ | 419,411 | $ | 287,464 | $ | 131,947 | 46 | % | |||||||||||||
| Homebuilding gross margin % | 24.6 | % | 21.6 | % | 3.0 | % | 24.3 | % | 21.1 | % | 3.2 | % | |||||||||||||||||
| Adjusted homebuilding gross margin %* | 27.7 | % | 24.6 | % | 3.1 | % | 27.3 | % | 24.1 | % | 3.2 | % | |||||||||||||||||
| SG&A expense | $ | 96,752 | $ | 82,748 | $ | 14,004 | 17 | % | $ | 178,561 | $ | 165,222 | $ | 13,339 | 8 | % | |||||||||||||
| SG&A expense as a % of home sales revenue | 9.6 | % | 10.8 | % | (1.2 | )% | 10.3 | % | 12.1 | % | (1.8 | )% | |||||||||||||||||
| Net income | $ | 117,869 | $ | 56,528 | $ | 61,341 | 109 | % | $ | 188,671 | $ | 88,411 | $ | 100,260 | 113 | % | |||||||||||||
| Adjusted EBITDA* | $ | 201,986 | $ | 120,771 | $ | 81,215 | 67 | % | $ | 328,066 | $ | 188,727 | $ | 139,339 | 74 | % | |||||||||||||
| Interest incurred | $ | 22,558 | $ | 21,828 | $ | 730 | 3 | % | $ | 43,737 | $ | 42,607 | $ | 1,130 | 3 | % | |||||||||||||
| Interest in cost of home sales | $ | 30,851 | $ | 21,801 | $ | 9,050 | 42 | % | $ | 51,529 | $ | 38,623 | $ | 12,906 | 33 | % | |||||||||||||
| Other Data: | |||||||||||||||||||||||||||||
| Net new home orders | 1,622 | 1,332 | 290 | 22 | % | 3,609 | 2,993 | 616 | 21 | % | |||||||||||||||||||
| New homes delivered | 1,545 | 1,229 | 316 | 26 | % | 2,671 | 2,187 | 484 | 22 | % | |||||||||||||||||||
| Average sales price of homes delivered | $ | 653 | $ | 624 | $ | 29 | 5 | % | $ | 646 | $ | 623 | $ | 23 | 4 | % | |||||||||||||
| Cancellation rate | 7 | % | 21 | % | (14 | )% | 7 | % | 17 | % | (10 | )% | |||||||||||||||||
| Average selling communities | 114.5 | 144.3 | (29.8 | ) | (21 | )% | 113.4 | 142.4 | (29.0 | ) | (20 | )% | |||||||||||||||||
| Selling communities at end of period | 109 | 145 | (36 | ) | (25 | )% | |||||||||||||||||||||||
| Backlog (estimated dollar value) | $ | 2,524,442 | $ | 1,679,068 | $ | 845,374 | 50 | % | |||||||||||||||||||||
| Backlog (homes) | 3,902 | 2,558 | 1,344 | 53 | % | ||||||||||||||||||||||||
| Average sales price in backlog | $ | 647 | $ | 656 | $ | (9 | ) | (1 | )% | ||||||||||||||||||||
| June 30, | December 31, | ||||||||||||||||||||||||||||
| 2021 | 2020 | Change | % Change | ||||||||||||||||||||||||||
| Balance Sheet Data: | (unaudited) | ||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 556,483 | $ | 621,295 | $ | (64,812 | ) | (10 | )% | ||||||||||||||||||||
| Real estate inventories | $ | 3,085,582 | $ | 2,910,142 | $ | 175,440 | 6 | % | |||||||||||||||||||||
| Lots owned or controlled | 37,112 | 35,641 | 1,471 | 4 | % | ||||||||||||||||||||||||
| Homes under construction (1) | 4,336 | 3,044 | 1,292 | 42 | % | ||||||||||||||||||||||||
| Homes completed, unsold | 19 | 68 | (49 | ) | (72 | )% | |||||||||||||||||||||||
| Debt | $ | 1,344,574 | $ | 1,343,001 | $ | 1,573 | 0 | % | |||||||||||||||||||||
| Stockholders’ equity | $ | 2,279,290 | $ | 2,232,537 | $ | 46,753 | 2.1 | % | |||||||||||||||||||||
| Book capitalization | $ | 3,623,864 | $ | 3,575,538 | $ | 48,326 | 1 | % | |||||||||||||||||||||
| Ratio of debt-to-capital | 37.1 | % | 37.6 | % | (0.5 | )% | |||||||||||||||||||||||
| Ratio of net debt-to-net capital* | 25.7 | % | 24.4 | % | 1.3 | % | |||||||||||||||||||||||
__________
(1) Homes under construction included 91 and 86 models at June 30, 2021 and December 31, 2020, respectively.
* See “Reconciliation of Non-GAAP Financial Measures”
CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
| June 30, | December 31, | ||||||
| 2021 | 2020 | ||||||
| Assets | (unaudited) | ||||||
| Cash and cash equivalents | $ | 556,483 | $ | 621,295 | |||
| Receivables | 91,348 | 63,551 | |||||
| Real estate inventories | 3,085,582 | 2,910,142 | |||||
| Investments in unconsolidated entities | 74,051 | 75,056 | |||||
| Goodwill and other intangible assets, net | 156,604 | 158,529 | |||||
| Deferred tax assets, net | 44,388 | 47,525 | |||||
| Other assets | 151,701 | 145,882 | |||||
| Total assets | $ | 4,160,157 | $ | 4,021,980 | |||
| Liabilities | |||||||
| Accounts payable | $ | 141,143 | $ | 79,690 | |||
| Accrued expenses and other liabilities | 395,138 | 366,740 | |||||
| Loans payable | 258,979 | 258,979 | |||||
| Senior notes | 1,085,595 | 1,084,022 | |||||
| Total liabilities | 1,880,855 | 1,789,431 | |||||
| Commitments and contingencies | |||||||
| Equity | |||||||
| Stockholders’ equity: | |||||||
| Preferred stock, | — | — | |||||
| Common stock, | 1,150 | 1,219 | |||||
| Additional paid-in capital | 203,288 | 345,137 | |||||
| Retained earnings | 2,074,852 | 1,886,181 | |||||
| Total stockholders’ equity | 2,279,290 | 2,232,537 | |||||
| Noncontrolling interests | 12 | 12 | |||||
| Total equity | 2,279,302 | 2,232,549 | |||||
| Total liabilities and equity | $ | 4,160,157 | $ | 4,021,980 | |||
CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| Homebuilding: | |||||||||||||||
| Home sales revenue | $ | 1,009,307 | $ | 766,942 | $ | 1,725,982 | $ | 1,361,780 | |||||||
| Land and lot sales revenue | 5,416 | 220 | 6,939 | 220 | |||||||||||
| Other operations revenue | 660 | 648 | 1,323 | 1,266 | |||||||||||
| Total revenues | 1,015,383 | 767,810 | 1,734,244 | 1,363,266 | |||||||||||
| Cost of home sales | 761,215 | 601,434 | 1,306,571 | 1,074,316 | |||||||||||
| Cost of land and lot sales | 4,874 | 374 | 5,027 | 576 | |||||||||||
| Other operations expense | 686 | 624 | 1,310 | 1,248 | |||||||||||
| Sales and marketing | 45,489 | 45,194 | 85,949 | 87,831 | |||||||||||
| General and administrative | 51,263 | 37,554 | 92,612 | 77,391 | |||||||||||
| Restructuring charges | — | 5,549 | — | 5,549 | |||||||||||
| Homebuilding income from operations | 151,856 | 77,081 | 242,775 | 116,355 | |||||||||||
| Equity in loss of unconsolidated entities | (16 | ) | (25 | ) | (29 | ) | (39 | ) | |||||||
| Other income (loss), net | 149 | (6,328 | ) | 257 | (5,955 | ) | |||||||||
| Homebuilding income before income taxes | 151,989 | 70,728 | 243,003 | 110,361 | |||||||||||
| Financial Services: | |||||||||||||||
| Revenues | 2,681 | 2,296 | 4,786 | 3,890 | |||||||||||
| Expenses | 1,485 | 1,285 | 2,892 | 2,364 | |||||||||||
| Equity in income of unconsolidated entities | 3,949 | 2,932 | 6,640 | 4,488 | |||||||||||
| Financial services income before income taxes | 5,145 | 3,943 | 8,534 | 6,014 | |||||||||||
| Income before income taxes | 157,134 | 74,671 | 251,537 | 116,375 | |||||||||||
| Provision for income taxes | (39,265 | ) | (18,143 | ) | (62,866 | ) | (27,964 | ) | |||||||
| Net income | $ | 117,869 | $ | 56,528 | $ | 188,671 | $ | 88,411 | |||||||
| Earnings per share | |||||||||||||||
| Basic | $ | 1.01 | $ | 0.43 | $ | 1.60 | $ | 0.67 | |||||||
| Diluted | $ | 1.00 | $ | 0.43 | $ | 1.59 | $ | 0.67 | |||||||
| Weighted average shares outstanding | |||||||||||||||
| Basic | 116,824,108 | 130,292,563 | 118,082,691 | 132,326,856 | |||||||||||
| Diluted | 117,770,084 | 130,506,567 | 118,921,340 | 132,763,775 | |||||||||||
MARKET DATA BY REPORTING SEGMENT & STATE
(dollars in thousands)
(unaudited)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||
| New Homes Delivered | Average Sales Price | New Homes Delivered | Average Sales Price | New Homes Delivered | Average Sales Price | New Homes Delivered | Average Sales Price | ||||||||||||||||||||
| Arizona | 223 | $ | 652 | 165 | $ | 525 | 383 | $ | 658 | 305 | $ | 519 | |||||||||||||||
| California | 698 | 705 | 490 | 737 | 1,155 | 692 | 829 | 747 | |||||||||||||||||||
| Nevada | 127 | 589 | 109 | 505 | 201 | 602 | 189 | 515 | |||||||||||||||||||
| Washington | 69 | 968 | 40 | 916 | 147 | 985 | 92 | 871 | |||||||||||||||||||
| West total | 1,117 | 697 | 804 | 671 | 1,886 | 698 | 1,415 | 675 | |||||||||||||||||||
| Colorado | 59 | 568 | 55 | 595 | 99 | 582 | 119 | 580 | |||||||||||||||||||
| Texas | 233 | 498 | 254 | 477 | 447 | 477 | 463 | 469 | |||||||||||||||||||
| Central total | 292 | 512 | 309 | 498 | 546 | 496 | 582 | 492 | |||||||||||||||||||
| Maryland | 72 | 570 | 75 | 556 | 130 | 559 | 130 | 558 | |||||||||||||||||||
| North Carolina | 21 | 407 | — | — | 35 | 392 | — | — | |||||||||||||||||||
| South Carolina | — | — | — | — | 4 | 285 | — | — | |||||||||||||||||||
| Virginia | 43 | 725 | 41 | 777 | 70 | 727 | 60 | 791 | |||||||||||||||||||
| East total | 136 | 594 | 116 | 635 | 239 | 579 | 190 | 632 | |||||||||||||||||||
| Total | 1,545 | $ | 653 | 1,229 | $ | 624 | 2,671 | $ | 646 | 2,187 | $ | 623 | |||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||||||||||||||
| 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 | ||||||||||||||||||||
| Arizona | 233 | 15.2 | 162 | 19.0 | 494 | 15.1 | 402 | 16.9 | |||||||||||||||||||
| California | 630 | 39.0 | 598 | 54.0 | 1,320 | 38.6 | 1,262 | 54.9 | |||||||||||||||||||
| Nevada | 180 | 11.3 | 102 | 16.5 | 435 | 11.6 | 268 | 15.4 | |||||||||||||||||||
| Washington | 90 | 6.2 | 105 | 9.5 | 161 | 5.6 | 231 | 8.3 | |||||||||||||||||||
| West total | 1,133 | 71.7 | 967 | 99.0 | 2,410 | 70.9 | 2,163 | 95.5 | |||||||||||||||||||
| Colorado | 58 | 5.8 | 50 | 3.8 | 163 | 5.3 | 109 | 4.1 | |||||||||||||||||||
| Texas | 278 | 22.0 | 205 | 29.7 | 707 | 23.0 | 439 | 30.1 | |||||||||||||||||||
| Central total | 336 | 27.8 | 255 | 33.5 | 870 | 28.3 | 548 | 34.2 | |||||||||||||||||||
| Maryland | 46 | 5.7 | 80 | 8.5 | 109 | 5.8 | 203 | 9.1 | |||||||||||||||||||
| North Carolina | 24 | 1.8 | — | — | 66 | 1.6 | — | — | |||||||||||||||||||
| South Carolina | 16 | 2.0 | — | — | 22 | 1.5 | — | — | |||||||||||||||||||
| Virginia | 67 | 5.5 | 30 | 3.3 | 132 | 5.3 | 79 | 3.6 | |||||||||||||||||||
| East total | 153 | 15.0 | 110 | 11.8 | 329 | 14.2 | 282 | 12.7 | |||||||||||||||||||
| Total | 1,622 | 114.5 | 1,332 | 144.3 | 3,609 | 113.4 | 2,993 | 142.4 | |||||||||||||||||||
MARKET DATA BY REPORTING SEGMENT & STATE, continued
(dollars in thousands)
(unaudited)
| As of June 30, 2021 | As of June 30, 2020 | ||||||||||||||||||||
| Backlog Units | Backlog Dollar Value | Average Sales Price | Backlog Units | Backlog Dollar Value | Average Sales Price | ||||||||||||||||
| Arizona | 590 | $ | 424,048 | $ | 719 | 427 | $ | 255,916 | $ | 599 | |||||||||||
| California | 1,423 | 921,602 | 648 | 985 | 689,789 | 700 | |||||||||||||||
| Nevada | 370 | 245,895 | 665 | 216 | 134,652 | 623 | |||||||||||||||
| Washington | 153 | 165,314 | 1,080 | 228 | 213,093 | 935 | |||||||||||||||
| West total | 2,536 | 1,756,859 | 693 | 1,856 | 1,293,450 | 697 | |||||||||||||||
| Colorado | 190 | 126,913 | 668 | 90 | 54,170 | 602 | |||||||||||||||
| Texas | 758 | 372,381 | 491 | 321 | 146,650 | 457 | |||||||||||||||
| Central total | 948 | 499,294 | 527 | 411 | 200,820 | 489 | |||||||||||||||
| Maryland | 180 | 107,524 | 597 | 190 | 108,856 | 573 | |||||||||||||||
| North Carolina | 43 | 18,509 | 430 | — | — | — | |||||||||||||||
| South Carolina | 21 | 7,662 | 365 | — | — | — | |||||||||||||||
| Virginia | 174 | 134,594 | 774 | 101 | 75,942 | 752 | |||||||||||||||
| East total | 418 | 268,289 | 642 | 291 | 184,798 | 635 | |||||||||||||||
| Total | 3,902 | $ | 2,524,442 | $ | 647 | 2,558 | $ | 1,679,068 | $ | 656 | |||||||||||
| June 30, | December 31, | ||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||
| Lots Owned or Controlled: | |||||||||||||||||||||
| Arizona | 3,865 | 4,128 | |||||||||||||||||||
| California | 14,749 | 15,040 | |||||||||||||||||||
| Nevada | 2,191 | 2,639 | |||||||||||||||||||
| Washington | 933 | 964 | |||||||||||||||||||
| West total | 21,738 | 22,771 | |||||||||||||||||||
| Colorado | 1,506 | 1,080 | |||||||||||||||||||
| Texas | 8,900 | 6,985 | |||||||||||||||||||
| Central total | 10,406 | 8,065 | |||||||||||||||||||
| Maryland | 766 | 892 | |||||||||||||||||||
| North Carolina | 3,169 | 2,808 | |||||||||||||||||||
| South Carolina | 102 | 106 | |||||||||||||||||||
| Virginia | 931 | 999 | |||||||||||||||||||
| East total | 4,968 | 4,805 | |||||||||||||||||||
| Total | 37,112 | 35,641 | |||||||||||||||||||
| June 30, | December 31, | ||||||||||||||||||||
| 2021 | 2020 | ||||||||||||||||||||
| Lots by Ownership Type: | |||||||||||||||||||||
| Lots owned | 22,706 | 22,620 | |||||||||||||||||||
| Lots controlled (1) | 14,406 | 13,021 | |||||||||||||||||||
| Total | 37,112 | 35,641 | |||||||||||||||||||
(1) As of June 30, 2021 and December 31, 2020, lots controlled included lots that were under land option contracts or purchase contracts. As of June 30, 2021, lots controlled for Central and East include 2,060 lots and 184 lots, respectively, which represent our expected share of lots owned by our unconsolidated land development joint ventures.
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, | |||||||||||||
| 2021 | % | 2020 | % | ||||||||||
| (dollars in thousands) | |||||||||||||
| Home sales revenue | $ | 1,009,307 | 100.0 | % | $ | 766,942 | 100.0 | % | |||||
| Cost of home sales | 761,215 | 75.4 | % | 601,434 | 78.4 | % | |||||||
| Homebuilding gross margin | 248,092 | 24.6 | % | 165,508 | 21.6 | % | |||||||
| Add: interest in cost of home sales | 30,851 | 3.1 | % | 21,801 | 2.8 | % | |||||||
| Add: impairments and lot option abandonments | 232 | 0.0 | % | 1,380 | 0.2 | % | |||||||
| Adjusted homebuilding gross margin | $ | 279,175 | 27.7 | % | $ | 188,689 | 24.6 | % | |||||
| Homebuilding gross margin percentage | 24.6 | % | 21.6 | % | |||||||||
| Adjusted homebuilding gross margin percentage | 27.7 | % | 24.6 | % | |||||||||
| Six Months Ended June 30, | |||||||||||||
| 2021 | % | 2020 | % | ||||||||||
| (dollars in thousands) | |||||||||||||
| Home sales revenue | $ | 1,725,982 | 100.0 | % | $ | 1,361,780 | 100.0 | % | |||||
| Cost of home sales | 1,306,571 | 75.7 | % | 1,074,316 | 78.9 | % | |||||||
| Homebuilding gross margin | 419,411 | 24.3 | % | 287,464 | 21.1 | % | |||||||
| Add: interest in cost of home sales | 51,529 | 3.0 | % | 38,623 | 2.8 | % | |||||||
| Add: impairments and lot option abandonments | 445 | 0.0 | % | 1,729 | 0.1 | % | |||||||
| Adjusted homebuilding gross margin | $ | 471,385 | 27.3 | % | $ | 327,816 | 24.1 | % | |||||
| Homebuilding gross margin percentage | 24.3 | % | 21.1 | % | |||||||||
| Adjusted homebuilding gross margin percentage | 27.3 | % | 24.1 | % | |||||||||
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, 2021 | December 31, 2020 | ||||||
| Loans payable | $ | 258,979 | $ | 258,979 | |||
| Senior notes | 1,085,595 | 1,084,022 | |||||
| Total debt | 1,344,574 | 1,343,001 | |||||
| Stockholders’ equity | 2,279,290 | 2,232,537 | |||||
| Total capital | $ | 3,623,864 | $ | 3,575,538 | |||
| Ratio of debt-to-capital(1) | 37.1 | % | 37.6 | % | |||
| Total debt | $ | 1,344,574 | $ | 1,343,001 | |||
| Less: Cash and cash equivalents | (556,483 | ) | (621,295 | ) | |||
| Net debt | 788,091 | 721,706 | |||||
| Stockholders’ equity | 2,279,290 | 2,232,537 | |||||
| Net capital | $ | 3,067,381 | $ | 2,954,243 | |||
| Ratio of net debt-to-net capital(2) | 25.7 | % | 24.4 | % | |||
__________
(1) The ratio of debt-to-capital is computed as the quotient obtained by dividing total debt by the sum of total debt plus stockholders’ equity.
(2) The ratio of net debt-to-net capital is computed as the quotient obtained by dividing net debt (which is total debt less cash and cash equivalents) by the sum of net debt plus stockholders’ equity.
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
(unaudited)
The following table calculates the non-GAAP financial 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) expensing of previously capitalized interest included in costs of home sales, (c) income taxes and (d) depreciation and amortization. Adjusted EBITDA means EBITDA before (e) amortization of stock-based compensation, (f) impairments and lot option abandonments, (g) early loan termination costs and (h) 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, | ||||||||||||||
| 2021 | 2020 | 2021 | 2020 | ||||||||||||
| (in thousands) | |||||||||||||||
| Net income | $ | 117,869 | $ | 56,528 | $ | 188,671 | $ | 88,411 | |||||||
| Interest expense: | |||||||||||||||
| Interest incurred | 22,558 | 21,828 | 43,737 | 42,607 | |||||||||||
| Interest capitalized | (22,558 | ) | (21,828 | ) | (43,737 | ) | (42,607 | ) | |||||||
| Amortization of interest in cost of sales | 31,124 | 21,806 | 51,802 | 38,628 | |||||||||||
| Provision for income taxes | 39,265 | 18,143 | 62,866 | 27,964 | |||||||||||
| Depreciation and amortization | 8,990 | 6,720 | 16,120 | 12,176 | |||||||||||
| EBITDA | 197,248 | 103,197 | 319,459 | 167,179 | |||||||||||
| Amortization of stock-based compensation | 4,506 | 3,786 | 8,162 | 7,411 | |||||||||||
| Impairments and lot option abandonments | 232 | 1,380 | 445 | 1,729 | |||||||||||
| Early loan termination costs | — | 6,859 | — | 6,859 | |||||||||||
| Restructuring charges | — | 5,549 | — | 5,549 | |||||||||||
| Adjusted EBITDA | $ | 201,986 | $ | 120,771 | $ | 328,066 | $ | 188,727 | |||||||
FAQ
What are Tri Pointe Homes' Q2 2021 earnings results?
What was the impact of the stock repurchase program on TPH?
How did backlog and home orders perform in Q2 2021 for TPH?
What are the expectations for Tri Pointe Homes in Q3 2021?
What are the homebuilding gross margin projections for 2021?
