2015 First Quarter Results. Maracay Homes Pardee Homes Quadrant Homes Trendmaker Homes TRI Pointe Homes Winchester Homes

Transcription

1 2015 First Quarter Results Maracay Homes Pardee Homes Quadrant Homes Trendmaker Homes TRI Pointe Homes Winchester Homes

2 Forward Looking Statement Various statements contained in this presentation, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include projections and estimates concerning the timing and success of specific projects, our ability to achieve the anticipated benefits of the Weyerhaeuser Real Estate Company (WRECO) transaction and our future production, operational and financial results, financial condition, prospects, and capital spending. Our forward-looking statements are generally accompanied by words such as estimate, project, predict, believe, expect, intend, anticipate, potential, plan, goal, will, or other words that convey future events or outcomes. The forward-looking statements in this presentation speak only as of the date of this presentation, 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; energy prices; the effect of weather; the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters; transportation costs; federal and state tax policies; the effect of land use, environment and other governmental regulations; legal proceedings; 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; the risk that disruptions from the WRECO transaction will harm our business; our ability to achieve the benefits of the WRECO transaction in the estimated amount and the anticipated timeframe, if at all; our ability to integrate WRECO successfully and to achieve the anticipated synergies therefrom; changes in accounting principles; our relationship, and actual and potential conflicts of interest, with Starwood Capital Group or its affiliates; 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.

3 Management Team Thomas Mitchell President & COO 28 years of real estate and homebuilding experience Former EVP and Southern California Regional President at William Lyon Homes Douglas Bauer Chief Executive Officer 28 years of real estate and homebuilding experience Former President and COO of William Lyon Homes Previously, managed WLH Northern California Division Michael Grubbs Chief Financial Officer 28 years of real estate and homebuilding experience Former SVP / CFO of William Lyon Homes Previously, real estate accountant at Kenneth Leventhal Working together for over 20 years, TRI Pointe senior management has significant experience running a large, geographically diverse, growth-oriented public homebuilder. Deep managerial talent at each operating division with key local relationships supports dynamic tailored growth strategies. 3

4 Leading Brand Names Targeted to Specific Markets Markets: Orange County, Los Angeles, San Diego, San Francisco Bay Area, Denver LTM Orders: 695 LTM Deliveries: 543 LTM HB Revenue: $431,077 LTM ASP:$794 Lots Owned or Controlled: 3,683 Market: Greater Puget Sound Area LTM Orders: 389 LTM Deliveries: 335 LTM HB Revenue: $146,550 LTM ASP: $437 Lots Owned or Controlled: 1,497 Markets: Washington DC, Richmond LTM Orders: 370 LTM Deliveries:396 LTM HB Revenue: $275,789 LTM ASP: $696 Lots Owned or Controlled: 2,675 Markets: Los Angeles/Ventura, Inland Empire, San Diego, Las Vegas LTM Orders: 1,033 LTM Deliveries: 1,065 LTM HB Revenue: $504,439 LTM ASP: $474 Lots Owned or Controlled: 17,297 Markets: Phoenix, Tucson LTM Orders: 441 LTM Deliveries: 382 LTM HB Revenue: $147,936 LTM ASP: $387 Lots Owned or Controlled: 2,186 Market: Houston LTM Orders: 546 LTM Deliveries: 539 LTM HB Revenue: $272,846 LTM ASP: $506 Lots Owned or Controlled: 1,980 Adjusted LTM Orders: 3,474 Adjusted LTM Deliveries: 3,260 Adjusted LTM HB Revenue: $1,778,637 Adjusted LTM ASP: $546 Lots Owned or Controlled: 29,318 All lots owned or controlled as of March 31, The term Adjusted includes GAAP results plus legacy TRI Pointe operations for the period prior to July 7, 2014, the closing date of the WRECO transaction. See Reconciliation of Non-GAAP Financial Measures in the appendix of the presentation. 4

5 First Quarter Highlights

6 2015 First Quarter Highlights FIRST QUARTER HIGHLIGHTS AND COMPARISONS TO FIRST QUARTER 2014 Net income $15.3M; $0.09 per diluted share Home sale revenue up 55% to $374.3M New home orders increased 79% to 1,194 New home deliveries up 31% to 668 with increased average sales price of 18% to $560k Homebuilding gross margin of 19.9% Adjusted homebuilding gross margin of 21.8% (1) SG&A expense improved to 13.8% compared to 16.1% FIRST QUARTER HIGHLIGHTS AND COMPARISONS TO FIRST QUARTER 2014 Adjusted (1)(2) Home sale revenue up 19% to $374.3M New home orders increased 48% to 1,194 New home deliveries up 11% to 668 with increased average sales price of 7% to $560k (1) See Reconciliation of Non-GAAP Financial Measures in the appendix of the presentation. (2) The term Adjusted includes GAAP results plus legacy TRI Pointe operations for the first quarter of

7 Active Selling Communities and Absorption Rate Active Communities and Absorption Rate As of and for the quarters ended March 31, 2014 and 2015 Communities by State As of March 31, % Washington 10% Virginia 7% Arizona 15% Texas 23% California 27% Colorado 6% Nevada 8% Maryland 4% Communities Absorption Rate 7

8 Increase 79% YOY Increase 48% YOY New Home Orders First Quarter Results First Quarter - New Home Orders For the quarters ended March 31, 2014 and 2015 GAAP and on an adjusted basis (1) Orders by State For the quarter ended March 31, ,400 1,200 1,194 1,194 Washington 13% Arizona 14% 1, GAAP Adjusted Virginia 5% Texas 11% Colorado 6% Nevada 8% Maryland 4% California 39% (1) Includes legacy TRI Pointe operations for the first quarter of See Reconciliation of Non-GAAP Financial Measures in the appendix of this presentation. 8

9 Increase 31% YOY Increase 11% YOY New Home Deliveries First Quarter Results First Quarter New Home Deliveries For the quarters ended March 31, 2014 and GAAP and on an adjusted basis (1) Deliveries by State For the quarter ended March 31, Washington 14% Arizona 13% Virginia 6% 400 GAAP 300 Adjusted Texas 16% California 33% Colorado 5% Nevada 8% Maryland 5% (1) Includes legacy TRI Pointe operations for the first quarter of See Reconciliation of Non-GAAP Financial Measures in the appendix of this presentation. 9

10 Increase 48% YOY Increase 59% YOY Backlog Units and Dollar Value ( GAAP ) Backlog Units and Dollar Value As of March 31, 2014 and 2015 (dollars in thousands) Dollar Value by State As of March 31, ,056 Units 1,558 $594,550 $943,352 $ Value $1,000,000 $900,000 $800,000 $700,000 $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $- Texas 14% Colorado 7% Virginia 9% Washington 7% Nevada 4% Maryland 5% Arizona 7% California 47% $563K $605K Backlog ASP 10

11 Increase 25% YOY Increase 25% YOY Backlog Units and Dollar Value ( Adjusted ) (1) Backlog Units and Dollar Value ( Adjusted ) As of and for the quarters ended March 31, 2014 and 2015 (dollars in thousands) Dollar Value by State As of March 31, ,251 1,558 $752,242 $943, $1,000,000 $900,000 $800,000 $700,000 Virginia 9% Washington 7% Arizona 7% Units $ Value $601K $605K Average Sales Price $600,000 $500,000 $400,000 $300,000 $200,000 $100,000 $- Texas 14% Colorado 7% Nevada 4% Maryland 5% California 47% (1) Includes legacy TRI Pointe operations for the first quarter of See Reconciliation of Non-GAAP Financial Measures in the appendix of this presentation. 11

12 Increase 55% YOY Increase 19% YOY Home Sales Revenue First Quarter Home Sales Revenue For the quarter ended March 31, 2014 and 2015 (dollars in thousands) Home Sales Revenue by State For the quarter ended March 31, 2015 $500,000 Washington 12% Arizona 9% $400,000 $300,000 $241,902 $314,714 $374,265 $374,265 GAAP Adjusted Virginia 8% $200,000 Texas 15% California 42% $100,000 $0 $476K $525K $560K $560K Average Sales Price Colorado 4% Nevada 5% Maryland 5% 12

13 2015 Outlook

14 Re-iterate 2015 Outlook Increase home deliveries by 25% over the 2014 deliveries of the combined company (1) Average sales price of homes delivered of $550,000 Expand homebuilding gross margins for the year as compared to GAAP 2014 results; delivering full year homebuilding gross margin of approximately 21% Improve the SG&A as a % of home sales revenue to a range of 10.5% to 11.0% Open 55 new communities and grow active selling community count by 15% to 20% by end of the year Earn $1.15 to $1.30 on a fully diluted per share basis (1) Includes legacy TRI Pointe operations for the periods prior to July 7, 2014, the closing date of the WRECO transaction. 14

15 Second Quarter 2015 Update and Outlook New home orders up 45% for the month of April over the combined company (1) results for the comparable month a year ago Anticipate delivering approximately 50% of the 1,558 homes in backlog as of March 31, 2015 Open 16 new communities and close out of 9 communities, resulting in 124 active selling communities as of June 30, 2015 Anticipate flat homebuilding gross margins on deliveries in 2Q15 as compared to 1Q15 (1) Includes legacy TRI Pointe operations for the month of April

16 Additional Information

17 New Home Orders July 2014 April 2015 New Home Orders (July 2014 through April 2015) Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr Absorption Rate = Orders per Month per Community 17

18 Significant Land Supply to Fuel Growth Combined Lot Position As of March 31, 2015 Market Owned Controlled Total Lots % Owned Inventory Dollars LTM Deliveries (2) Years of Supply California 18, ,511 98% $1,416,803 1, Colorado % $73, Washington, D.C. (1) 2, ,675 87% $275, Arizona 1, ,186 57% $157, Nevada 1, ,767 98% $150, Texas 896 1,084 1,980 45% $183, Washington ,497 63% $151, Total 25,750 3,568 29,318 88% $2,409,306 3, Total Lots Inventory Dollars 7% 5% California 8% 6% 6% 8% Colorado Washington, D.C. (1) Arizona 7% 6% Nevada 9% 2% 63% Texas Washington 11% 59% 3% (1) 18Includes lots in the greater Washington D.C. area. (2) Includes legacy TRI Pointe operations for the period prior to July 7, 2014, the closing date of the WRECO transaction. See Reconciliation of Non-GAAP Financial Measures in the appendix of this presentation.

19 TRI Pointe Solutions TRI Pointe Solutions a wholly-owned subsidiary formed to provide buyer services including mortgage and title insurance related services 100% owned by TRI Pointe Solutions Title Agency arrangement in conjunction with First American Title Licensed in Texas Anticipate licensing in Maryland & Virginia by June 2015 Mortgage company Joint venture with imortgage Licensed in Arizona, Washington, Colorado, Virginia, Maryland and Texas Anticipate licensing in Nevada and California by June

20 Supplemental Data and Reconciliation

21 Reconciliation of Non-GAAP Financial Measures (unaudited) In this presentation, we utilize certain financial measures that are non-gaap financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to 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 table reconciles homebuilding gross margin percentage, as reported and prepared in accordance with GAAP, to the non- GAAP measure adjusted homebuilding gross margin percentage. We believe this information is meaningful as it 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 March 31, 2015 % 2014 % (dollars in thousands) Home sales $ 374, % $ 241, % Cost of home sales 299, % 191, % Homebuilding gross margin 74, % 50, % Add: interest in cost of home sales 6, % 3, % Add: impairments and lot option abandonments % % Adjusted homebuilding gross margin $ 81, % $ 54, % Homebuilding gross margin percentage 19.9 % 20.9 % Adjusted homebuilding gross margin percentage 21.8 % 22.5 % 21

22 Reconciliation of Non-GAAP Financial Measures (cont d)(unaudited) The merger with Weyerhaeuser Real Estate Company ( WRECO ) was accounted for as a "reverse acquisition" of TRI Pointe by WRECO in accordance with ASC Topic 805, "Business Combinations." As a result, legacy TRI Pointe's financial results are not included in the combined company s GAAP results for any period prior to July 7, 2014, the closing date of the merger. This schedule provides certain supplemental financial and operations information of the combined company that is Adjusted" to include legacy TRI Pointe stand-alone operations. No other adjustments have been made to the supplemental combined company information provided and this information is summary only and may not necessarily be indicative of the results had the merger occurred at the beginning of the periods presented or the financial condition to be expected for the remainder of the year or any future date or period. The following schedule provides certain supplemental financial and operations information of the combined company that is Adjusted" to include legacy TRI Pointe stand-alone operations for the three month ending March 31, 2104 as though the WRECO merger was completed on January 1, Three Months Ended March 31, 2015 March 31, 2014 Combined Legacy Combined Combined Legacy Combined Reported Adjustments Adjusted Reported Adjustments Adjusted Supplemental Operating Data: (dollars in thousands) Home sales revenue $ 374,265 NA $ 374,265 $ 241,902 $ 72, ,714 Net new home orders 1,194 NA 1, New homes delivered 668 NA Average selling price of homes $ 560 NA $ 560 $ 476 $ 791 $ 525 delivered Average selling communities NA Selling communities at end of period 117 NA Cancellation rate 11 % NA 11 % 15 % 8 % 14 % Backlog (estimated dollar value) $ 943,352 NA $ 943,352 $ 594,550 $ 157,692 $ 752,242 Backlog (homes) 1,558 NA 1,558 1, ,251 Average selling price in backlog 605 NA