Tri Pointe Homes, Inc. (the “Company”) (NYSE:TPH) today announced results for the first quarter ended March 31, 2024.

“I am pleased to report our first quarter results, which again met or exceeded the high end of our guidance across all key operating metrics,” said Doug Bauer, Tri Pointe Homes Chief Executive Officer. “We delivered 1,393 homes at an average sales price of $659,000, resulting in home sales revenue of $918 million, a 20% increase compared to the previous year. Homebuilding gross margin percentage was 23.0% for the quarter, a sequential improvement compared to our most recent quarter. These outstanding results culminated in net income of $99 million and diluted earnings per share of $1.03, marking a 41% improvement year-over-year.”

Mr. Bauer continued, “In addition to the strong financial results for the quarter, we wrote 1,814 net new home orders, an increase of 12% compared to the prior year, on a healthy absorption pace for the quarter of 3.9 homes per community per month. Consumer demand has been strong to start the year as the new homebuilders continue to benefit from the lack of resale supply.”

“Building on our successful start to 2024, we are thrilled to have recently announced the official expansion of our national footprint with the opening of new divisions in Orlando, Florida, and the Coastal Carolinas, further enhancing our presence in two of the fastest-growing regions in the nation,” said Tom Mitchell, Tri Pointe Homes Chief Operating Officer. “This move aligns perfectly with our strategic vision of building scale within existing markets, while also driving organic growth where value-enhancing market opportunities exist.”

Mr. Bauer concluded, “The strong demand we have experienced to start the year has allowed us to reduce incentives and increase pricing in select communities. As a result, we are raising full-year guidance for deliveries, average sales price, and homebuilding gross margin percentage. The underlying fundamentals continue to be strong for homebuilders and we feel Tri Pointe is in a great position to thrive in this environment.”

Results and Operational Data for First Quarter 2024 and Comparisons to First Quarter 2023

  • Net income available to common stockholders was $99.1 million, or $1.03 per diluted share, compared to $74.7 million, or $0.73 per diluted share
  • Home sales revenue of $918.4 million compared to $768.4 million, an increase of 20%
    • New home deliveries of 1,393 homes compared to 1,065 homes, an increase of 31%
    • Average sales price of homes delivered of $659,000 compared to $722,000, a decrease of 9%
  • Homebuilding gross margin percentage of 23.0% compared to 23.5%, a decrease of 50 basis points
    • Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 26.4%*
  • SG&A expense as a percentage of home sales revenue of 11.1% compared to 11.5%, a decrease of 40 basis points
  • Net new home orders of 1,814 compared to 1,619, an increase of 12%
  • Active selling communities averaged 153.8 compared to 136.0, an increase of 13%
    • Net new home orders per average selling community were 11.8 orders (3.9 monthly) compared to 11.9 orders (4.0 monthly)
    • Cancellation rate of 7% compared to 10%
  • Backlog units at quarter end of 2,741 homes compared to 2,026, an increase of 35%
    • Dollar value of backlog at quarter end of $2.0 billion compared to $1.5 billion, an increase of 30%
    • Average sales price of homes in backlog at quarter end of $712,000 compared to $742,000, a decrease of 4%
  • Ratios of debt-to-capital and net debt-to-net capital of 31.2% and 12.6%*, respectively, as of March 31, 2024
  • Repurchased 1,442,785 shares of common stock at a weighted average price per share of $34.66 for an aggregate dollar amount of $50.0 million in the three months ended March 31, 2024
  • Ended the first quarter of 2024 with total liquidity of $1.6 billion, including cash and cash equivalents of $944.0 million and $703.2 million of availability under our revolving credit facility

* See “Reconciliation of Non-GAAP Financial Measures”

Outlook

For the second quarter, the Company anticipates delivering between 1,500 and 1,600 homes at an average sales price between $670,000 and $680,000. The Company expects homebuilding gross margin percentage to be in the range of 22.5% to 23.5% for the second quarter and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 11.0% to 11.5%. Finally, the Company expects its effective tax rate for the second quarter to be approximately 26.0%.

For the full year, the Company anticipates delivering between 6,200 and 6,400 homes at an average sales price between $660,000 and $670,000. The Company expects homebuilding gross margin percentage to be in the range of 22.5% to 23.5% for the full year and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 10.5% to 11.0%. Finally, the Company expects its effective tax rate for the full year to be approximately 26.0%.

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, April 25, 2024. 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, Executive Vice President and 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 First Quarter 2024 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 13745505. 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 operating in 12 states and the District of Columbia, and is a recognized leader in customer experience, innovative design, and environmentally responsible business practices. The company builds premium homes and communities 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 to the 2024 Fortune World’s Most Admired Companies™ list, is 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 March 31,
      2024       2023     Change   % Change
Operating Data:   (unaudited)
Home sales revenue   $ 918,353     $ 768,405     $ 149,948     20 %
Homebuilding gross margin   $ 211,049     $ 180,287     $ 30,762     17 %
Homebuilding gross margin %     23.0 %     23.5 %     (0.5 )%    
Adjusted homebuilding gross margin %*     26.4 %     26.2 %     0.2 %    
SG&A expense   $ 101,552     $ 88,228     $ 13,324     15 %
SG&A expense as a % of home sales revenue     11.1 %     11.5 %     (0.4 )%    
Net income available to common stockholders   $ 99,055     $ 74,742     $ 24,313     33 %
Adjusted EBITDA*   $ 175,893     $ 133,975     $ 41,918     31 %
Interest incurred   $ 36,156     $ 37,479     $ (1,323 )   (4 )%
Interest in cost of home sales   $ 30,649     $ 20,226     $ 10,423     52 %
                 
Other Data:                
Net new home orders     1,814       1,619       195     12 %
New homes delivered     1,393       1,065       328     31 %
Average sales price of homes delivered   $ 659     $ 722     $ (63 )   (9 )%
Cancellation rate     7 %     10 %     (3 )%    
Average selling communities     153.8       136.0       17.8     13 %
Selling communities at end of period     156       136       20     15 %
Backlog (estimated dollar value)   $ 1,950,590     $ 1,503,382     $ 447,208     30 %
Backlog (homes)     2,741       2,026       715     35 %
Average sales price in backlog   $ 712     $ 742     $ (30 )   (4 )%
                 
    March 31,   December 31,        
      2024       2023     Change   % Change
Balance Sheet Data:   (unaudited)            
Cash and cash equivalents   $ 943,998     $ 868,953     $ 75,045     9 %
Real estate inventories   $ 3,422,883     $ 3,337,483     $ 85,400     3 %
Lots owned or controlled     34,153       31,960       2,193     7 %
Homes under construction (1)     3,317       3,088       229     7 %
Homes completed, unsold     232       263       (31 )   (12 )%
Debt   $ 1,383,529     $ 1,382,586     $ 943     0 %
Stockholders’ equity   $ 3,049,646     $ 3,010,958     $ 38,688     1 %
Book capitalization   $ 4,433,175     $ 4,393,544     $ 39,631     1 %
Ratio of debt-to-capital     31.2 %     31.5 %     (0.3 )%    
Ratio of net debt-to-net capital*     12.6 %     14.6 %     (2.0 )%    

__________(1) Homes under construction included 60 and 69 models as of March 31, 2024 and December 31, 2023, respectively.* See “Reconciliation of Non-GAAP Financial Measures”

CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
    March 31,   December 31,
      2024       2023  
Assets   (unaudited)    
Cash and cash equivalents   $ 943,998     $ 868,953  
Receivables     125,133       224,636  
Real estate inventories     3,422,883       3,337,483  
Investments in unconsolidated entities     124,723       131,824  
Goodwill and other intangible assets, net     156,603       156,603  
Deferred tax assets, net     37,996       37,996  
Other assets     158,639       157,093  
Total assets   $ 4,969,975     $ 4,914,588  
         
Liabilities        
Accounts payable   $ 51,736     $ 64,833  
Accrued expenses and other liabilities     485,052       453,531  
Loans payable     288,337       288,337  
Senior notes     1,095,192       1,094,249  
Total liabilities     1,920,317       1,900,950  
         
Commitments and contingencies        
         
Equity        
Stockholders’ equity:        
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding as of March 31, 2024 and December 31, 2023, respectively            
Common stock, $0.01 par value, 500,000,000 shares authorized; 94,877,377 and 95,530,512 shares issued and outstanding at March 31, 2024 and December 31, 2023, respectively     949       955  
Additional paid-in capital            
Retained earnings     3,048,697       3,010,003  
Total stockholders’ equity     3,049,646       3,010,958  
Noncontrolling interests     12       2,680  
Total equity     3,049,658       3,013,638  
Total liabilities and equity   $ 4,969,975     $ 4,914,588  

CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
 
    Three Months Ended March 31,
      2024       2023  
Homebuilding:        
Home sales revenue   $ 918,353     $ 768,405  
Land and lot sales revenue     7,068       1,706  
Other operations revenue     787       674  
Total revenues     926,208       770,785  
Cost of home sales     707,304       588,118  
Cost of land and lot sales     5,757       1,443  
Other operations expense     765       665  
Sales and marketing     50,224       41,862  
General and administrative     51,328       46,366  
Homebuilding income from operations     110,830       92,331  
Equity in income of unconsolidated entities     57       227  
Other income, net     15,226       7,604  
Homebuilding income before income taxes     126,113       100,162  
Financial Services:        
Revenues     13,194       8,876  
Expenses     8,727       5,831  
Financial services income before income taxes     4,467       3,045  
Income before income taxes     130,580       103,207  
Provision for income taxes     (31,584 )     (27,350 )
Net income     98,996       75,857  
Net income attributable to noncontrolling interests     59       (1,115 )
Net income available to common stockholders   $ 99,055     $ 74,742  
Earnings per share        
Basic   $ 1.04     $ 0.74  
Diluted   $ 1.03     $ 0.73  
Weighted average shares outstanding        
Basic     95,232,315       101,019,253  
Diluted     95,846,756       101,706,438  

MARKET DATA BY REPORTING SEGMENT & GEOGRAPHY
(dollars in thousands)
(unaudited)
 
    Three Months Ended March 31,
    2024   2023
    NewHomesDelivered   AverageSalesPrice   NewHomesDelivered   AverageSalesPrice
Arizona   137     $ 736     135     $ 785  
California   417       771     339       829  
Nevada   113       684     98       761  
Washington   53       901     18       956  
West total   720       760     590       811  
Colorado   42       738     44       788  
Texas   440       549     210       625  
Central total   482       565     254       653  
Carolinas(1)   174       462     175       438  
Washington D.C. Area(2)   17       1,056     46       1,023  
East total   191       515     221       560  
Total   1,393     $ 659     1,065     $ 722  
                     
    Three Months Ended March 31,
    2024   2023
    Net NewHomeOrders   AverageSellingCommunities   Net NewHomeOrders   AverageSellingCommunities
Arizona   156       12.2     117       13.0  
California   613       46.0     701       53.2  
Nevada   154       9.5     84       7.0  
Washington   107       5.8     52       5.0  
West total   1,030       73.5     954       78.2  
Colorado   47       11.0     41       6.0  
Texas   483       52.5     314       33.8  
Central total   530       63.5     355       39.8  
Carolinas(1)   179       11.5     251       14.5  
Washington D.C. Area(2)   75       5.3     59       3.5  
East total   254       16.8     310       18.0  
Total   1,814       153.8     1,619       136.0  

(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 March 31, 2024   As of March 31, 2023
    BacklogUnits   BacklogDollarValue   AverageSalesPrice   BacklogUnits   BacklogDollarValue   AverageSalesPrice
Arizona   278     $ 205,547     $ 739     360     $ 308,514     $ 857  
California   894       713,036       798     660       506,979       768  
Nevada   172       105,211       612     111       86,919       783  
Washington   144       130,336       905     69       61,148       886  
West total   1,488       1,154,130       776     1,200       963,560       803  
Colorado   53       36,840       695     47       35,511       756  
Texas   749       442,134       590     386       236,386       612  
Central total   802       478,974       597     433       271,897       628  
Carolinas(1)   287       148,286       517     296       139,815       472  
Washington D.C. Area(2)   164       169,200       1,032     97       128,110       1,321  
East total   451       317,486       704     393       267,925       682  
Total   2,741     $ 1,950,590     $ 712     2,026     $ 1,503,382     $ 742  
                             
    March 31,   December 31,                  
    2024     2023                    
Lots Owned or Controlled:                            
Arizona   2,258       2,394                    
California   10,846       10,148                    
Nevada   1,771       1,785                    
Washington   659       712                    
West total   15,534       15,039                    
Colorado   2,517       1,908                    
Texas   10,321       10,056                    
Utah   61                          
Central total   12,899       11,964                    
Carolinas(1)   4,457       4,038                    
Washington D.C. Area(2)   1,263       919                    
East total   5,720       4,957                    
Total   34,153       31,960                    
                             
    March 31,   December 31,                  
    2024     2023                    
Lots by Ownership Type:                            
Lots owned   18,480       18,739                    
Lots controlled(3)   15,673       13,221                    
Total   34,153       31,960                    

(1) Carolinas comprises North Carolina and South Carolina.(2) Washington D.C. Area comprises Maryland, Virginia and the District of Columbia.(3) As of March 31, 2024 and December 31, 2023, lots controlled included lots that were under land option contracts or purchase contracts. As of March 31, 2024 and December 31, 2023, lots controlled for Central include 3,566 and 3,561 lots, respectively, and lots controlled for East include 58 and 71 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 table reconciles 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 March 31,
      2024     %     2023     %
    (dollars in thousands)
Home sales revenue   $ 918,353     100.0 %   $ 768,405     100.0 %
Cost of home sales     707,304     77.0 %     588,118     76.5 %
Homebuilding gross margin     211,049     23.0 %     180,287     23.5 %
Add: interest in cost of home sales     30,649     3.3 %     20,226     2.6 %
Add: impairments and lot option abandonments     402     0.0 %     717     0.1 %
Adjusted homebuilding gross margin   $ 242,100     26.4 %   $ 201,230     26.2 %
Homebuilding gross margin percentage     23.0 %         23.5 %    
Adjusted homebuilding gross margin percentage     26.4 %         26.2 %    

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.

    March 31, 2024   December 31, 2023
Loans payable   $ 288,337     $ 288,337  
Senior notes     1,095,192       1,094,249  
Total debt     1,383,529       1,382,586  
Stockholders’ equity     3,049,646       3,010,958  
Total capital   $ 4,433,175     $ 4,393,544  
Ratio of debt-to-capital(1)     31.2 %     31.5 %
         
Total debt   $ 1,383,529     $ 1,382,586  
Less: Cash and cash equivalents     (943,998 )     (868,953 )
Net debt     439,531       513,633  
Stockholders’ equity     3,049,646       3,010,958  
Net capital   $ 3,489,177     $ 3,524,591  
Ratio of net debt-to-net capital(2)     12.6 %     14.6 %

__________(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 March 31,
      2024       2023  
    (in thousands)
Net income available to common stockholders   $ 99,055     $ 74,742  
Interest expense:        
Interest incurred     36,156       37,479  
Interest capitalized     (36,156 )     (37,479 )
Amortization of interest in cost of sales     30,846       20,251  
Provision for income taxes     31,584       27,350  
Depreciation and amortization     7,327       7,054  
EBITDA     168,812       129,397  
Amortization of stock-based compensation     6,679       3,861  
Impairments and lot option abandonments     402       717  
Adjusted EBITDA   $ 175,893     $ 133,975  
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TRI Pointe Homes (NYSE:TPH)
Historical Stock Chart
From Jul 2023 to Jul 2024 Click Here for more TRI Pointe Homes Charts.