Tri Pointe Homes, Inc. Reports 2023 Third Quarter Results
- Net new home orders increased 122% YoY to 1,513
- Active selling communities increased 23% YoY to 163
- Home sales revenue of $825 million
- Diluted earnings per share of $0.76
- Debt-to-capital ratio of 32.1%
- Total liquidity of $1.5 billion
- None.
-Net New Home Orders Increased
-Active Selling Communities Increased
-Home Sales Revenue of
-Homebuilding Gross Margin Percentage of
-Diluted Earnings Per Share of
-Debt-to-Capital Ratio of
INCLINE VILLAGE, Nev., Oct. 26, 2023 (GLOBE NEWSWIRE) -- Tri Pointe Homes, Inc. (the “Company”) (NYSE:TPH) today announced results for the third quarter ended September 30, 2023.
“Tri Pointe delivered a strong operational performance in the third quarter, surpassing our delivery guidance and generating home sales revenue of
Mr. Bauer continued, “Our strategic focus remains on growing scale within our current markets, while also growing our market diversification through organic expansion or M&A opportunities. During the third quarter, we announced our organic entrance into the Salt Lake City, Utah market, which we view as having a diverse, strong, and growing economy coupled with a desirable quality of life, and we are very excited to commence operations this year.”
“Consistent with our strategic initiatives for the year, our ability to remain disciplined with cost while normalizing our cycle times helped us deliver both strong top and bottom-line results for the third quarter,” said Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “As we move into the fourth quarter, our focus on operational efficiency remains unwavering. Further, with mortgage rates remaining elevated, we are acutely focused on the impact this has on affordability and buyer sentiment, and we are well-positioned to tactically implement the pricing and incentive strategies necessary to achieve our targeted sales goals.”
Mr. Bauer concluded, “Our robust balance sheet and strong liquidity position not only enable us to navigate the current market dynamics with resilience, but also enable us to swiftly capitalize on emerging opportunities. As macroeconomic circumstances continue to unfold, we believe the backdrop for new housing remains positive, and Tri Pointe is well positioned to seize the opportunities which have been further exacerbated by the growing scarcity of resale supply.”
Results and Operational Data for Third Quarter 2023 and Comparisons to Third Quarter 2022
- Net income available to common stockholders was
$75.4 million , or$0.76 per diluted share, compared to$149.2 million , or$1.45 per diluted share - Home sales revenue of
$825.3 million compared to$1.1 billion , a decrease of22% - New home deliveries of 1,223 homes compared to 1,463 homes, a decrease of
16% - Average sales price of homes delivered of
$675,000 compared to$723,000 , a decrease of7%
- New home deliveries of 1,223 homes compared to 1,463 homes, a decrease of
- Homebuilding gross margin percentage of
22.3% compared to27.1% , a decrease of 480 basis points- Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was
25.6% *
- 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
12.3% compared to9.1% , an increase of 320 basis points - Net new home orders of 1,513 compared to 681, an increase of
122% - Active selling communities averaged 154.8 compared to 128.3, an increase of
21% - Net new home orders per average selling community were 9.8 orders (3.3 monthly) compared to 5.3 orders (1.8 monthly)
- Cancellation rate of
10% compared to27%
- Backlog units at quarter end of 3,055 homes compared to 3,044
- Dollar value of backlog at quarter end of
$2.1 billion compared to$2.4 billion , a decrease of13% - Average sales price of homes in backlog at quarter end of
$693,000 compared to$797,000 , a decrease of13%
- Dollar value of backlog at quarter end of
- Ratios of debt-to-capital and net debt-to-net capital of
32.1% and15.4% *, respectively, as of September 30, 2023 - Repurchased 1,753,045 shares of common stock at a weighted average price per share of
$31.10 for an aggregate dollar amount of$54.5 million in the three months ended September 30, 2023 - Ended the third quarter of 2023 with total liquidity of
$1.5 billion , including cash and cash equivalents of$849.0 million and$699.9 million of availability under our revolving credit facility
| * | See “Reconciliation of Non-GAAP Financial Measures” |
Outlook
For the fourth quarter, the Company anticipates delivering between 1,600 and 1,800 homes at an average sales price between
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, October 26, 2023. The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer, Glenn Keeler, Chief Financial Officer, and Linda Mamet, Chief Marketing 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 Third Quarter 2023 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 13741533. 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, Inc. (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, was named one of the 2023 Fortune 100 Best Companies to Work For®, and was designated as one of the 2023 PEOPLE Companies That Care®. The company was also named as a Great Place To Work-Certified™ company for three years in a row (2021 through 2023), and was named on several Great Place To Work® Best Workplaces lists in 2022 and 2023. 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 general economic conditions, including employment rates, housing starts, interest rate levels, home affordability, inflation, consumer sentiment, 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; levels of competition; the successful execution of our internal performance plans, including restructuring and cost reduction initiatives; the prices and availability of supply chain inputs, including raw materials, labor and home components; 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 parts of the western United States; 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 public health emergencies, including outbreaks of contagious disease, 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:
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 September 30, | Nine Months Ended September 30, | ||||||||||||||||||||||||||||
| 2023 | 2022 | Change | % Change | 2023 | 2022 | Change | % Change | ||||||||||||||||||||||
| Operating Data: | (unaudited) | ||||||||||||||||||||||||||||
| Home sales revenue | $ | 825,295 | $ | 1,057,491 | $ | (232,196 | ) | (22)% | $ | 2,412,777 | $ | 2,787,386 | $ | (374,609 | ) | (13)% | |||||||||||||
| Homebuilding gross margin | $ | 184,221 | $ | 286,343 | $ | (102,122 | ) | (36)% | $ | 531,586 | $ | 754,226 | $ | (222,640 | ) | (30)% | |||||||||||||
| Homebuilding gross margin % | 22.3 | % | 27.1 | % | (4.8)% | 22.0 | % | 27.1 | % | (5.1)% | |||||||||||||||||||
| Adjusted homebuilding gross margin %* | 25.6 | % | 29.9 | % | (4.3)% | 25.6 | % | 29.7 | % | (4.1)% | |||||||||||||||||||
| SG&A expense | $ | 101,233 | $ | 96,736 | $ | 4,497 | 5 | % | $ | 286,926 | $ | 272,783 | $ | 14,143 | 5 | % | |||||||||||||
| SG&A expense as a % of home sales revenue | 12.3 | % | 9.1 | % | 3.2 | % | 11.9 | % | 9.8 | % | 2.1 | % | |||||||||||||||||
| Net income available to common stockholders | $ | 75,402 | $ | 149,226 | $ | (73,824 | ) | (49)% | $ | 210,868 | $ | 373,087 | $ | (162,219 | ) | (43)% | |||||||||||||
| Adjusted EBITDA* | $ | 139,678 | $ | 237,369 | $ | (97,691 | ) | (41)% | $ | 403,581 | $ | 604,365 | $ | (200,784 | ) | (33)% | |||||||||||||
| Interest incurred | $ | 36,919 | $ | 31,893 | $ | 5,026 | 16 | % | $ | 111,792 | $ | 89,235 | $ | 22,557 | 25 | % | |||||||||||||
| Interest in cost of home sales | $ | 27,035 | $ | 26,531 | $ | 504 | 2 | % | $ | 72,627 | $ | 68,559 | $ | 4,068 | 6 | % | |||||||||||||
| Other Data: | |||||||||||||||||||||||||||||
| Net new home orders | 1,513 | 681 | 832 | 122 | % | 5,044 | 3,933 | 1,111 | 28 | % | |||||||||||||||||||
| New homes delivered | 1,223 | 1,463 | (240 | ) | (16)% | 3,461 | 4,047 | (586 | ) | (14)% | |||||||||||||||||||
| Average sales price of homes delivered | $ | 675 | $ | 723 | $ | (48 | ) | (7)% | $ | 697 | $ | 689 | $ | 8 | 1 | % | |||||||||||||
| Cancellation rate | 10 | % | 27 | % | (17)% | 9 | % | 15 | % | (6)% | |||||||||||||||||||
| Average selling communities | 154.8 | 128.3 | 26.5 | 21 | % | 144.3 | 120.7 | 23.6 | 20 | % | |||||||||||||||||||
| Selling communities at end of period | 163 | 133 | 30 | 23 | % | ||||||||||||||||||||||||
| Backlog (estimated dollar value) | $ | 2,117,319 | $ | 2,427,301 | $ | (309,982 | ) | (13)% | |||||||||||||||||||||
| Backlog (homes) | 3,055 | 3,044 | 11 | 0 | % | ||||||||||||||||||||||||
| Average sales price in backlog | $ | 693 | $ | 797 | $ | (104 | ) | (13)% | |||||||||||||||||||||
| September 30, | December 31, | ||||||||||||||||||||||||||||
| 2023 | 2022 | Change | % Change | ||||||||||||||||||||||||||
| Balance Sheet Data: | (unaudited) | ||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 849,039 | $ | 889,664 | $ | (40,625 | ) | (5)% | |||||||||||||||||||||
| Real estate inventories | $ | 3,412,797 | $ | 3,173,849 | $ | 238,948 | 8 | % | |||||||||||||||||||||
| Lots owned or controlled | 32,964 | 33,794 | (830 | ) | (2)% | ||||||||||||||||||||||||
| Homes under construction(1) | 3,558 | 2,373 | 1,185 | 50 | % | ||||||||||||||||||||||||
| Homes completed, unsold | 185 | 288 | (103 | ) | (36)% | ||||||||||||||||||||||||
| Debt | $ | 1,381,658 | $ | 1,378,051 | $ | 3,607 | 0 | % | |||||||||||||||||||||
| Stockholders’ equity | $ | 2,923,397 | $ | 2,832,389 | $ | 91,008 | 3 | % | |||||||||||||||||||||
| Book capitalization | $ | 4,305,055 | $ | 4,210,440 | $ | 94,615 | 2 | % | |||||||||||||||||||||
| Ratio of debt-to-capital | 32.1 | % | 32.7 | % | (0.6)% | ||||||||||||||||||||||||
| Ratio of net debt-to-net capital* | 15.4 | % | 14.7 | % | 0.7 | % | |||||||||||||||||||||||
__________
(1) Homes under construction included 68 and 78 models as of September 30, 2023 and December 31, 2022, respectively.
* See “Reconciliation of Non-GAAP Financial Measures”
| CONSOLIDATED BALANCE SHEETS (in thousands, except share and per share amounts) | |||||
| September 30, | December 31, | ||||
| 2023 | 2022 | ||||
| Assets | (unaudited) | ||||
| Cash and cash equivalents | $ | 849,039 | $ | 889,664 | |
| Receivables | 119,406 | 169,449 | |||
| Real estate inventories | 3,412,797 | 3,173,849 | |||
| Investments in unconsolidated entities | 139,384 | 129,837 | |||
| Goodwill and other intangible assets, net | 156,603 | 156,603 | |||
| Deferred tax assets, net | 34,850 | 34,851 | |||
| Other assets | 158,152 | 165,687 | |||
| Total assets | $ | 4,870,231 | $ | 4,719,940 | |
| Liabilities | |||||
| Accounts payable | $ | 55,231 | $ | 62,324 | |
| Accrued expenses and other liabilities | 509,189 | 443,034 | |||
| Loans payable | 288,337 | 287,427 | |||
| Senior notes | 1,093,321 | 1,090,624 | |||
| Total liabilities | 1,946,078 | 1,883,409 | |||
| Commitments and contingencies | |||||
| Equity | |||||
| Stockholders’ equity: | |||||
| Preferred stock, | — | — | |||
| Common stock, | 973 | 1,010 | |||
| Additional paid-in capital | — | 3,685 | |||
| Retained earnings | 2,922,424 | 2,827,694 | |||
| Total stockholders’ equity | 2,923,397 | 2,832,389 | |||
| Noncontrolling interests | 756 | 4,142 | |||
| Total equity | 2,924,153 | 2,836,531 | |||
| Total liabilities and equity | $ | 4,870,231 | $ | 4,719,940 | |
| CONSOLIDATED STATEMENT OF OPERATIONS (in thousands, except share and per share amounts) (unaudited) | |||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| Homebuilding: | |||||||||||||||
| Home sales revenue | $ | 825,295 | $ | 1,057,491 | $ | 2,412,777 | $ | 2,787,386 | |||||||
| Land and lot sales revenue | 1,714 | 2,626 | 10,506 | 4,337 | |||||||||||
| Other operations revenue | 749 | 674 | 2,219 | 2,021 | |||||||||||
| Total revenues | 827,758 | 1,060,791 | 2,425,502 | 2,793,744 | |||||||||||
| Cost of home sales | 641,074 | 771,148 | 1,881,191 | 2,033,160 | |||||||||||
| Cost of land and lot sales | 1,474 | 1,256 | 10,287 | 2,075 | |||||||||||
| Other operations expense | 724 | 670 | 2,171 | 2,020 | |||||||||||
| Sales and marketing | 42,874 | 41,950 | 127,977 | 112,712 | |||||||||||
| General and administrative | 58,359 | 54,786 | 158,949 | 160,071 | |||||||||||
| Homebuilding income from operations | 83,253 | 190,981 | 244,927 | 483,706 | |||||||||||
| Equity in income (loss) of unconsolidated entities | 3 | (122 | ) | 272 | (34 | ) | |||||||||
| Other income, net | 11,664 | 463 | 30,361 | 852 | |||||||||||
| Homebuilding income before income taxes | 94,920 | 191,322 | 275,560 | 484,524 | |||||||||||
| Financial Services: | |||||||||||||||
| Revenues | 10,758 | 11,005 | 30,004 | 31,985 | |||||||||||
| Expenses | 6,127 | 5,827 | 19,363 | 17,457 | |||||||||||
| Equity in income of unconsolidated entities | — | — | — | 46 | |||||||||||
| Financial services income before income taxes | 4,631 | 5,178 | 10,641 | 14,574 | |||||||||||
| Income before income taxes | 99,551 | 196,500 | 286,201 | 499,098 | |||||||||||
| Provision for income taxes | (22,942 | ) | (45,923 | ) | (71,764 | ) | (122,084 | ) | |||||||
| Net income | 76,609 | 150,577 | 214,437 | 377,014 | |||||||||||
| Net income attributable to noncontrolling interests | (1,207 | ) | (1,351 | ) | (3,569 | ) | (3,927 | ) | |||||||
| Net income available to common stockholders | $ | 75,402 | $ | 149,226 | $ | 210,868 | $ | 373,087 | |||||||
| Earnings per share | |||||||||||||||
| Basic | $ | 0.77 | $ | 1.47 | $ | 2.12 | $ | 3.60 | |||||||
| Diluted | $ | 0.76 | $ | 1.45 | $ | 2.10 | $ | 3.57 | |||||||
| Weighted average shares outstanding | |||||||||||||||
| Basic | 98,018,498 | 101,242,708 | 99,534,570 | 103,555,717 | |||||||||||
| Diluted | 99,030,210 | 102,661,222 | 100,458,357 | 104,526,594 | |||||||||||
| MARKET DATA BY REPORTING SEGMENT & GEOGRAPHY (dollars in thousands) (unaudited) | |||||||||||||||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| 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 | 167 | $ | 809 | 166 | $ | 732 | 497 | $ | 785 | 363 | $ | 733 | |||||||
| California | 425 | 683 | 636 | 698 | 1,116 | 764 | 1,729 | 690 | |||||||||||
| Nevada | 103 | 749 | 122 | 724 | 289 | 751 | 363 | 711 | |||||||||||
| Washington | 48 | 847 | 46 | 1,092 | 106 | 823 | 172 | 1,023 | |||||||||||
| West total | 743 | 731 | 970 | 773 | 2,008 | 770 | 2,627 | 742 | |||||||||||
| Colorado | 17 | 733 | 82 | 682 | 110 | 754 | 201 | 662 | |||||||||||
| Texas | 287 | 527 | 250 | 511 | 775 | 565 | 788 | 507 | |||||||||||
| Central total | 304 | 538 | 332 | 616 | 885 | 589 | 989 | 562 | |||||||||||
| Carolinas(1) | 122 | 445 | 80 | 462 | 439 | 454 | 152 | 458 | |||||||||||
| Washington D.C. Area(2) | 54 | 1,185 | 81 | 770 | 129 | 1,125 | 279 | 744 | |||||||||||
| East total | 176 | 672 | 161 | 638 | 568 | 607 | 431 | 657 | |||||||||||
| Total | 1,223 | $ | 675 | 1,463 | $ | 723 | 3,461 | $ | 697 | 4,047 | $ | 689 | |||||||
| Three Months Ended September 30, | Nine Months Ended September 30, | ||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||
| 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 | 129 | 14.0 | 74 | 13.5 | 435 | 13.6 | 484 | 13.5 | |||||||||||
| California | 508 | 48.8 | 275 | 53.7 | 1,996 | 50.6 | 1,577 | 47.5 | |||||||||||
| Nevada | 146 | 10.5 | 56 | 6.8 | 335 | 8.6 | 317 | 7.6 | |||||||||||
| Washington | 44 | 5.5 | 34 | 3.0 | 166 | 5.4 | 103 | 2.8 | |||||||||||
| West total | 827 | 78.8 | 439 | 77.0 | 2,932 | 78.2 | 2,481 | 71.4 | |||||||||||
| Colorado | 39 | 9.5 | 15 | 7.3 | 118 | 7.6 | 180 | 7.7 | |||||||||||
| Texas | 454 | 49.0 | 123 | 23.5 | 1,262 | 40.8 | 691 | 22.8 | |||||||||||
| Central total | 493 | 58.5 | 138 | 30.8 | 1,380 | 48.4 | 871 | 30.5 | |||||||||||
| Carolinas(1) | 139 | 14.5 | 76 | 13.7 | 578 | 14.4 | 372 | 11.3 | |||||||||||
| Washington D.C. Area(2) | 54 | 3.0 | 28 | 6.8 | 154 | 3.3 | 209 | 7.5 | |||||||||||
| East total | 193 | 17.5 | 104 | 20.5 | 732 | 17.7 | 581 | 18.8 | |||||||||||
| Total | 1,513 | 154.8 | 681 | 128.3 | 5,044 | 144.3 | 3,933 | 120.7 | |||||||||||
(1) Carolinas comprises North Carolina and South Carolina.
(2) Washington D.C. Area comprises Maryland, Virginia and the District of Columbia.
| MARKET DATA BY REPORTING SEGMENT & GEOGRAPHY, continued (dollars in thousands) (unaudited) | |||||||||||||||
| As of September 30, 2023 | As of September 30, 2022 | ||||||||||||||
| Backlog Units | Backlog Dollar Value | Average Sales Price | Backlog Units | Backlog Dollar Value | Average Sales Price | ||||||||||
| Arizona | 316 | $ | 233,631 | $ | 739 | 641 | $ | 531,135 | $ | 829 | |||||
| California | 1,178 | 892,158 | 757 | 884 | 836,320 | 946 | |||||||||
| Nevada | 171 | 112,684 | 659 | 280 | 232,850 | 832 | |||||||||
| Washington | 95 | 90,768 | 955 | 60 | 48,387 | 806 | |||||||||
| West total | 1,760 | 1,329,241 | 755 | 1,865 | 1,648,692 | 884 | |||||||||
| Colorado | 58 | 39,254 | 677 | 163 | 128,733 | 790 | |||||||||
| Texas | 769 | 448,721 | 584 | 539 | 346,530 | 643 | |||||||||
| Central total | 827 | 487,975 | 590 | 702 | 475,263 | 677 | |||||||||
| Carolinas(1) | 359 | 171,820 | 479 | 341 | 161,675 | 474 | |||||||||
| Washington D.C. Area(2) | 109 | 128,283 | 1,177 | 136 | 141,671 | 1,042 | |||||||||
| East total | 468 | 300,103 | 641 | 477 | 303,346 | 636 | |||||||||
| Total | 3,055 | $ | 2,117,319 | $ | 693 | 3,044 | $ | 2,427,301 | $ | 797 | |||||
| September 30, | December 31, | ||||||||||||||
| 2023 | 2022 | ||||||||||||||
| Lots Owned or Controlled: | |||||||||||||||
| Arizona | 2,352 | 2,901 | |||||||||||||
| California | 11,206 | 11,399 | |||||||||||||
| Nevada | 1,901 | 1,634 | |||||||||||||
| Washington | 779 | 827 | |||||||||||||
| West total | 16,238 | 16,761 | |||||||||||||
| Colorado | 1,942 | 1,600 | |||||||||||||
| Texas | 10,047 | 10,361 | |||||||||||||
| Central total | 11,989 | 11,961 | |||||||||||||
| Carolinas(1) | 3,760 | 3,857 | |||||||||||||
| Washington D.C. Area(2) | 977 | 1,215 | |||||||||||||
| East total | 4,737 | 5,072 | |||||||||||||
| Total | 32,964 | 33,794 | |||||||||||||
| September 30, | December 31, | ||||||||||||||
| 2023 | 2022 | ||||||||||||||
| Lots by Ownership Type: | |||||||||||||||
| Lots owned | 18,921 | 18,762 | |||||||||||||
| Lots controlled (3) | 14,043 | 15,032 | |||||||||||||
| Total | 32,964 | 33,794 | |||||||||||||
(1) Carolinas comprises North Carolina and South Carolina.
(2) Washington D.C. Area comprises Maryland, Virginia and the District of Columbia.
(3) As of September 30, 2023 and December 31, 2022, lots controlled included lots that were under land option contracts or purchase contracts. As of September 30, 2023 and December 31, 2022, lots controlled for Central include 3,042 and 3,325 lots, respectively, and lots controlled for East include 86 and 141 lots, respectively, which represent our expected share of lots owned by our investments in 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 the 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, | |||||||||||||
| 2023 | % | 2022 | % | ||||||||||
| (dollars in thousands) | |||||||||||||
| Home sales revenue | $ | 825,295 | 100.0 | % | $ | 1,057,491 | 100.0 | % | |||||
| Cost of home sales | 641,074 | 77.7 | % | 771,148 | 72.9 | % | |||||||
| Homebuilding gross margin | 184,221 | 22.3 | % | 286,343 | 27.1 | % | |||||||
| Add: interest in cost of home sales | 27,035 | 3.3 | % | 26,531 | 2.5 | % | |||||||
| Add: impairments and lot option abandonments | 197 | 0.0 | % | 3,034 | 0.3 | % | |||||||
| Adjusted homebuilding gross margin | $ | 211,453 | 25.6 | % | $ | 315,908 | 29.9 | % | |||||
| Homebuilding gross margin percentage | 22.3 | % | 27.1 | % | |||||||||
| Adjusted homebuilding gross margin percentage | 25.6 | % | 29.9 | % | |||||||||
| Nine Months Ended September 30, | |||||||||||||
| 2023 | % | 2022 | % | ||||||||||
| (dollars in thousands) | |||||||||||||
| Home sales revenue | $ | 2,412,777 | 100.0 | % | $ | 2,787,386 | 100.0 | % | |||||
| Cost of home sales | 1,881,191 | 78.0 | % | 2,033,160 | 72.9 | % | |||||||
| Homebuilding gross margin | 531,586 | 22.0 | % | 754,226 | 27.1 | % | |||||||
| Add: interest in cost of home sales | 72,627 | 3.0 | % | 68,559 | 2.5 | % | |||||||
| Add: impairments and lot option abandonments | 12,675 | 0.5 | % | 4,495 | 0.2 | % | |||||||
| Adjusted homebuilding gross margin | $ | 616,888 | 25.6 | % | $ | 827,280 | 29.7 | % | |||||
| Homebuilding gross margin percentage | 22.0 | % | 27.1 | % | |||||||||
| Adjusted homebuilding gross margin percentage | 25.6 | % | 29.7 | % | |||||||||
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, 2023 | December 31, 2022 | ||||||
| Loans payable | $ | 288,337 | $ | 287,427 | |||
| Senior notes | 1,093,321 | 1,090,624 | |||||
| Total debt | 1,381,658 | 1,378,051 | |||||
| Stockholders’ equity | 2,923,397 | 2,832,389 | |||||
| Total capital | $ | 4,305,055 | $ | 4,210,440 | |||
| Ratio of debt-to-capital(1) | 32.1 | % | 32.7 | % | |||
| Total debt | $ | 1,381,658 | $ | 1,378,051 | |||
| Less: Cash and cash equivalents | (849,039 | ) | (889,664 | ) | |||
| Net debt | 532,619 | 488,387 | |||||
| Stockholders’ equity | 2,923,397 | 2,832,389 | |||||
| Net capital | $ | 3,456,016 | $ | 3,320,776 | |||
| Ratio of net debt-to-net capital(2) | 15.4 | % | 14.7 | % | |||
__________
(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 available to common stockholders, as reported and prepared in accordance with GAAP. EBITDA means net income available to common stockholders 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 and (f) impairments and lot option abandonments. 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, | ||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||
| (in thousands) | |||||||||||||||
| Net income available to common stockholders | $ | 75,402 | $ | 149,226 | $ | 210,868 | $ | 373,087 | |||||||
| Interest expense: | |||||||||||||||
| Interest incurred | 36,919 | 31,893 | 111,792 | 89,235 | |||||||||||
| Interest capitalized | (36,919 | ) | (31,893 | ) | (111,792 | ) | (89,235 | ) | |||||||
| Amortization of interest in cost of sales | 27,264 | 26,611 | 73,196 | 68,639 | |||||||||||
| Provision for income taxes | 22,942 | 45,923 | 71,764 | 122,084 | |||||||||||
| Depreciation and amortization | 6,884 | 6,615 | 20,066 | 18,641 | |||||||||||
| EBITDA | 132,492 | 228,375 | 375,894 | 582,451 | |||||||||||
| Amortization of stock-based compensation | 6,989 | 5,717 | 15,012 | 16,740 | |||||||||||
| Impairments and lot option abandonments | 197 | 3,277 | 12,675 | 5,174 | |||||||||||
| Adjusted EBITDA | $ | 139,678 | $ | 237,369 | $ | 403,581 | $ | 604,365 | |||||||
FAQ
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