Form 8-K - Current report

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

_______________________________________________________________________________________

FORM 8-K

_______________________________________________________________________________________ 

CURRENT REPORT

Pursuant to Section 13 or 15(d) of

The Securities Exchange Act of 1934

Date of Report (Date of earliest event reported) July 25, 2024

_______________________________________________________________________________________

Tri Pointe Homes, Inc.

(Exact name of registrant as specified in its charter)

_______________________________________________________________________________________

Delaware

1-35796

61-1763235

(State or other jurisdiction of incorporation)

(Commission File Number)

(IRS Employer Identification No.)

 

940 Southwood Blvd, Suite 200

Incline Village, Nevada 89451

(Address of principal executive offices) (Zip Code)

Registrant’s telephone number, including area code [phone]

Not Applicable

(Former name or former address, if changed since last report.)

_______________________________________________________________________________________ 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐			Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐			Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐			Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐			Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Common Stock, par value $0.01 per share

TPH

New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

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Item 2.02     Results of Operations and Financial Condition

On July 25, 2024, Tri Pointe Homes, Inc., a Delaware corporation (the “Company”), announced in a press release its financial results for the quarter ended June 30, 2024. A copy of the Company’s press release announcing these financial results is attached as Exhibit 99.1 to this Current Report on Form 8-K.

The information furnished pursuant to this Item 2.02, including the exhibits attached hereto, shall not be deemed to be filed for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (“Exchange Act”), or otherwise subject to the liabilities of that section, nor shall it be incorporated by reference into any filings under the Securities Act of 1933, as amended, or the Exchange Act, except as expressly set forth in such filing. In addition, the press release furnished as an exhibit to this report includes “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995.

Item 9.01     Financial Statements and Exhibits

(d)Exhibits

99.1          Press Release dated July 25, 2024

104           Cover Page Interactive Data File, formatted in Inline XBRL

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

			Tri Pointe Homes, Inc.
Date: July 25, 2024			By:			/s/ Glenn J. Keeler
						Glenn J. Keeler, Chief Financial Officer

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Exhibit 99.1

TRI POINTE HOMES, INC. REPORTS 2024 SECOND QUARTER RESULTS

-Home Sales Revenue of $1.1 Billion-

-Homebuilding Gross Margin Percentage of 23.6%-

-Diluted Earnings Per Share of $1.25-

-Increased Dollar Value of Backlog to $2.0 Billion-

-Reduced Debt by $450 Million-

-Homebuilding Debt-to-Capital Ratio Reduced to Record Low of 22.9%-

INCLINE VILLAGE, Nev., July 25, 2024 / Tri Pointe Homes, Inc. (the “Company”) (NYSE:TPH) today announced results for the second quarter ended June 30, 2024.

“I am pleased to report another quarter of outstanding results, driven by our focus on expanding scale and efficiencies within our existing markets while building a foundation for future growth in our new markets,” said Doug Bauer, Tri Pointe Homes Chief Executive Officer. “We delivered 1,700 homes, resulting in home sales revenue of $1.1 billion, a 38% increase compared to the previous year. This strong revenue growth, fueled by the 45% increase in deliveries, resulted in net income of $118 million and diluted earnings per share of $1.25, increases of 94% and 108%, respectively, compared to the previous year.”

Mr. Bauer continued, “As we continue to build scale across our markets, and due to the strong demand and pricing power we have experienced in recent quarters, our homebuilding gross margin percentage increased 320 basis points year-over-year to 23.6%. Additionally, during the quarter, we redeemed $450 million of senior notes using cash on hand, which allowed us to reduce balance sheet debt and lower our homebuilding debt-to-capital ratio to a record low 22.9%, while maintaining strong liquidity of $1.2 billion, underscoring our commitment to fortifying our balance sheet.”

“Our organic start-up divisions in the Coastal Carolinas, Florida, and Utah are off to a strong start as we continue to attract talent and build land relationships in advance of our first deliveries,” said Tri Pointe Homes President and Chief Operating Officer, Tom Mitchell. “While we acknowledge that realizing the full value of our organic growth will require both capital investment and time, our cash flows continue to support this expansion and we see the benefits of geographic diversification. With ongoing demographic support and a persistent undersupply of homes, including the resale market, we believe we are in a strong position to utilize our capital to create significant value for our stakeholders.”

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

•Net income available to common stockholders was $118.0 million, or $1.25 per diluted share, compared to $60.7 million, or $0.60 per diluted share

•Home sales revenue of $1.1 billion compared to $819.1 million, an increase of 38%

◦New home deliveries of 1,700 homes compared to 1,173 homes, an increase of 45%

◦Average sales price of homes delivered of $666,000 compared to $698,000, a decrease of 5%

•Homebuilding gross margin percentage of 23.6% compared to 20.4%, an increase of 320 basis points

◦Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 27.1%*

•SG&A expense as a percentage of home sales revenue of 11.0% compared to 11.9%, a decrease of 90 basis points

•Net new home orders of 1,651 compared to 1,912, a decrease of 14%

•Active selling communities averaged 152.5 compared to 140.3, an increase of 9%

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◦Net new home orders per average selling community were 10.8 orders (3.6 monthly) compared to 13.6 orders (4.5 monthly)

◦Cancellation rate of 9% compared to 8%

•Backlog units at quarter end of 2,692 homes compared to 2,765, a decrease of 3%

◦Dollar value of backlog at quarter end of $2.0 billion compared to $1.9 billion, an increase of 4%

◦Average sales price of homes in backlog at quarter end of $743,000 compared to $695,000, an increase of 7%

•Redeemed and fully repaid the $450 million principal amount of 5.875% Senior Notes due June 2024

•Ratios of homebuilding debt-to-capital and net homebuilding debt-to-net capital of 22.9% and 12.2%*, respectively, as of June 30, 2024

•Repurchased 1,046,062 shares of common stock at a weighted average price per share of $35.08 for an aggregate dollar amount of $36.7 million in the three months ended June 30, 2024

•Ended the second quarter of 2024 with total liquidity of $1.2 billion, including cash and cash equivalents of $492.9 million and $707.3 million of availability under our revolving credit facility

 

*			See “Reconciliation of Non-GAAP Financial Measures”

Outlook

For the third quarter, the Company anticipates delivering between 1,450 and 1,550 homes at an average sales price between $685,000 and $695,000. The Company expects homebuilding gross margin percentage to be in the range of 23.0% to 23.5% for the third 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 third quarter to be approximately 25.5%.

For the full year, the Company anticipates delivering between 6,300 and 6,500 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 23.0% 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 25.5%.

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 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 [phone], or [phone] for international participants. Participants should ask for the Tri Pointe Homes Second 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 [phone], or [phone] for international participants, using the reference number 13747485. An archive of the webcast will also be available on the Company’s website for a limited time.

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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

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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:

[e-mail], 949-478-8696

Media Contact:

Carol Ruiz, [e-mail], 310-437-0045

  

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KEY OPERATIONS AND FINANCIAL DATA

(dollars in thousands)

(unaudited)

			Three Months Ended June 30,																								Six Months Ended June 30,
			2024						2023						Change						% Change						2024						2023						Change						% Change
Operating Data:			(unaudited)
Home sales revenue			$	1,133,008					$	819,077					$	313,931					38		%				$	2,051,361					$	1,587,482					$	463,879					29		%
Homebuilding gross margin			$	267,327					$	167,078					$	100,249					60		%				$	478,376					$	347,365					$	131,011					38		%
Homebuilding gross margin %			23.6		%				20.4		%				3.2		%										23.3		%				21.9		%				1.4		%
Adjusted homebuilding gross margin %*			27.1		%				24.9		%				2.2		%										26.8		%				25.5		%				1.3		%
SG&A expense			$	124,551					$	97,465					$	27,086					28		%				$	226,103					$	185,693					$	40,410					22		%
SG&A expense as a % of home sales revenue			11.0		%				11.9		%				(0.9)		%										11.0		%				11.7		%				(0.7)		%
Net income available to common stockholders			$	118,002					$	60,724					$	57,278					94		%				$	217,057					$	135,466					$	81,591					60		%
Adjusted EBITDA*			$	215,998					$	129,928					$	86,070					66		%				$	391,891					$	263,903					$	127,988					48		%
Interest incurred			$	30,378					$	37,394					$	(7,016)					(19)		%				$	66,534					$	74,873					$	(8,339)					(11)		%
Interest in cost of home sales			$	38,994					$	25,366					$	13,628					54		%				$	69,643					$	45,592					$	24,051					53		%
Other Data:
Net new home orders			1,651						1,912						(261)						(14)		%				3,465						3,531						(66)						(2)		%
New homes delivered			1,700						1,173						527						45		%				3,093						2,238						855						38		%
Average sales price of homes delivered			$	666					$	698					$	(32)					(5)		%				$	663					$	709					$	(46)					(6)		%
Cancellation rate			9		%				8		%				1		%										8		%				9		%				(1)		%
Average selling communities			152.5						140.3						12.2						9		%				152.7						138.4						14.3						10		%
Selling communities at end of period			153						145						8						6		%
Backlog (estimated dollar value)			$	1,999,852					$	1,922,895					$	76,957					4		%
Backlog (homes)			2,692						2,765						(73)						(3)		%
Average sales price in backlog			$	743					$	695					$	48					7		%
			June 30,						December 31,
			2024						2023						Change						% Change
Balance Sheet Data:			(unaudited)
Cash and cash equivalents			$	492,940					$	868,953					$	(376,013)					(43)		%
Real estate inventories			$	3,465,811					$	3,337,483					$	128,328					4		%
Lots owned or controlled			34,037						31,960						2,077						6		%
Homes under construction (1)			3,457						3,088						369						12		%
Homes completed, unsold			246						263						(17)						(6)		%
Total homebuilding debt			$	929,959					$	1,382,586					$	(452,627)					(33)		%
Stockholders’ equity			$	3,139,484					$	3,010,958					$	128,526					4		%
Book capitalization			$	4,069,443					$	4,393,544					$	(324,101)					(7)		%
Ratio of homebuilding debt-to-capital			22.9		%				31.5		%				(8.6)		%
Ratio of net homebuilding debt-to-net capital*			12.2		%				14.6		%				(2.4)		%

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(1)     Homes under construction included 34 and 69 models as of June 30, 2024 and December 31, 2023, respectively.

*    See “Reconciliation of Non-GAAP Financial Measures”

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CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share amounts)

 

			June 30,						December 31,
			2024						2023
Assets			(unaudited)
Cash and cash equivalents			$	492,940					$	868,953
Receivables			111,637						224,636
Real estate inventories			3,465,811						3,337,483
Investments in unconsolidated entities			133,591						131,824
Mortgage loans held for sale			32,936						—
Goodwill and other intangible assets, net			156,603						156,603
Deferred tax assets, net			37,996						37,996
Other assets			164,684						157,093
Total assets			$	4,596,198					$	4,914,588
Liabilities
Accounts payable			$	57,410					$	64,833
Accrued expenses and other liabilities			437,237						453,531
Loans payable			283,929						288,337
Senior notes			646,030						1,094,249
Mortgage repurchase facilities			32,096						—
Total liabilities			1,456,702						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 June 30, 2024 and December 31, 2023, respectively			—						—
Common stock, $0.01 par value, 500,000,000 shares authorized; 93,862,218 and 95,530,512 shares issued and outstanding at June 30, 2024 and December 31, 2023, respectively			939						955
Additional paid-in capital			—						—
Retained earnings			3,138,545						3,010,003
Total stockholders’ equity			3,139,484						3,010,958
Noncontrolling interests			12						2,680
Total equity			3,139,496						3,013,638
Total liabilities and equity			$	4,596,198					$	4,914,588

 

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CONSOLIDATED STATEMENT OF OPERATIONS

(in thousands, except share and per share amounts)

(unaudited)

 

			Three Months Ended June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
Homebuilding:
Home sales revenue			$	1,133,008					$	819,077					$	2,051,361					$	1,587,482
Land and lot sales revenue			4,160						7,086						11,228						8,792
Other operations revenue			782						796						1,569						1,470
Total revenues			1,137,950						826,959						2,064,158						1,597,744
Cost of home sales			865,681						651,999						1,572,985						1,240,117
Cost of land and lot sales			3,841						7,370						9,598						8,813
Other operations expense			765						782						1,530						1,447
Sales and marketing			56,804						43,241						107,028						85,103
General and administrative			67,747						54,224						119,075						100,590
Homebuilding income from operations			143,112						69,343						253,942						161,674
Equity in income of unconsolidated entities			99						42						156						269
Other income, net			9,934						11,093						25,160						18,697
Homebuilding income before income taxes			153,145						80,478						279,258						180,640
Financial Services:
Revenues			16,974						10,370						30,168						19,246
Expenses			10,890						7,405						19,617						13,236
Financial services income before income taxes			6,084						2,965						10,551						6,010
Income before income taxes			159,229						83,443						289,809						186,650
Provision for income taxes			(41,227)						(21,472)						(72,811)						(48,822)
Net income			118,002						61,971						216,998						137,828
Net income attributable to noncontrolling interests			—						(1,247)						59						(2,362)
Net income available to common stockholders			$	118,002					$	60,724					$	217,057					$	135,466
Earnings per share
Basic			$	1.25					$	0.61					$	2.29					$	1.35
Diluted			$	1.25					$	0.60					$	2.28					$	1.34
Weighted average shares outstanding
Basic			94,059,037						99,598,933						94,645,676						100,305,168
Diluted			94,740,019						100,634,964						95,305,469						101,184,993

 

 

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MARKET DATA BY REPORTING SEGMENT & GEOGRAPHY

(dollars in thousands)

(unaudited)

 

			Three Months Ended June 30,																								Six Months Ended June 30,
			2024												2023												2024												2023
			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			140						$	712					195						$	765					277						$	724					330						$	773
California			570						762						352						798						987						766						691						813
Nevada			117						646						88						743						230						665						186						753
Washington			74						875						40						733						127						886						58						802
West total			901						748						675						778						1,621						754						1,265						793
Colorado			53						675						49						732						95						703						93						758
Texas			475						556						278						560						915						553						488						588
Central total			528						568						327						586						1,010						567						581						615
Carolinas(1)			208						489						142						483						382						477						317						458
Washington D.C. Area(2)			63						904						29						1,176						80						937						75						1,082
East total			271						586						171						600						462						556						392						577
Total			1,700						$	666					1,173						$	698					3,093						$	663					2,238						$	709
			Three Months Ended June 30,																								Six Months Ended June 30,
			2024												2023												2024												2023
			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			182						15.2						189						13.7						338						13.6						306						13.4
California			576						42.2						787						49.2						1,189						44.1						1,488						51.6
Nevada			118						8.3						105						8.0						272						8.9						189						7.6
Washington			77						5.8						70						5.8						184						5.7						122						5.4
West total			953						71.5						1,151						76.7						1,983						72.3						2,105						78.0
Colorado			25						10.5						38						6.8						72						10.7						79						6.4
Texas			441						52.5						494						39.0						924						52.4						808						36.1
Central total			466						63.0						532						45.8						996						63.1						887						42.5
Carolinas(1)			130						11.5						188						14.3						309						11.4						439						14.5
Washington D.C. Area(2)			102						6.5						41						3.5						177						5.9						100						3.4
East total			232						18.0						229						17.8						486						17.3						539						17.9
Total			1,651						152.5						1,912						140.3						3,465						152.7						3,531						138.4

(1)     Carolinas comprises North Carolina and South Carolina.

(2)     Washington D.C. Area comprises Maryland, Virginia and the District of Columbia.

 

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MARKET DATA BY REPORTING SEGMENT & GEOGRAPHY, continued

(dollars in thousands)

(unaudited)

 

			As of June 30, 2024																		As of June 30, 2023
			Backlog Units						Backlog Dollar Value						Average Sales Price						Backlog Units						Backlog Dollar Value						Average Sales Price
Arizona			320						$	245,870					$	768					354						$	276,167					$	780
California			900						724,667						805						1,095						797,480						728
Nevada			173						100,881						583						128						94,278						737
Washington			147						138,919						945						99						91,266						922
West total			1,540						1,210,337						786						1,676						1,259,191						751
Colorado			25						18,664						747						36						24,889						691
Texas			715						428,420						599						602						340,938						566
Central total			740						447,084						604						638						365,827						573
Carolinas(1)			209						115,638						553						342						156,759						458
Washington D.C. Area(2)			203						226,793						1,117						109						141,118						1,295
East total			412						342,431						831						451						297,877						660
Total			2,692						$	1,999,852					$	743					2,765						$	1,922,895					$	695
			June 30,						December 31,
			2024						2023
Lots Owned or Controlled:
Arizona			2,123						2,394
California			10,650						10,148
Nevada			1,579						1,785
Washington			698						712
West total			15,050						15,039
Colorado			1,849						1,908
Texas			10,700						10,056
Utah			156						—
Central total			12,705						11,964
Carolinas(1)			5,022						4,038
Washington D.C. Area(2)			1,260						919
East total			6,282						4,957
Total			34,037						31,960
			June 30,						December 31,
			2024						2023
Lots by Ownership Type:
Lots owned			17,824						18,739
Lots controlled (3)			16,213						13,221
Total			34,037						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 June 30, 2024 and December 31, 2023, lots controlled included lots that were under land option contracts or purchase contracts. As of June 30, 2024 and December 31, 2023, lots controlled for Central include 3,449 and 3,561 lots, respectively, and lots controlled for East include 47 and 71 lots, respectively, which represent our expected share of lots owned by our investments in unconsolidated land development joint ventures.

Page 9

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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 June 30,
			2024						%						2023						%
			(dollars in thousands)
Home sales revenue			$	1,133,008					100.0		%				$	819,077					100.0		%
Cost of home sales			865,681						76.4		%				651,999						79.6		%
Homebuilding gross margin			267,327						23.6		%				167,078						20.4		%
Add:  interest in cost of home sales			38,994						3.4		%				25,366						3.1		%
Add:  impairments and lot option abandonments			968						0.1		%				11,761						1.4		%
Adjusted homebuilding gross margin			$	307,289					27.1		%				$	204,205					24.9		%
Homebuilding gross margin percentage			23.6		%										20.4		%
Adjusted homebuilding gross margin percentage			27.1		%										24.9		%

			Six Months Ended June 30,
			2024						%						2023						%
			(dollars in thousands)
Home sales revenue			$	2,051,361					100.0		%				$	1,587,482					100.0		%
Cost of home sales			1,572,985						76.7		%				1,240,117						78.1		%
Homebuilding gross margin			478,376						23.3		%				347,365						21.9		%
Add:  interest in cost of home sales			69,643						3.4		%				45,592						2.9		%
Add:  impairments and lot option abandonments			1,370						0.1		%				12,478						0.8		%
Adjusted homebuilding gross margin			$	549,389					26.8		%				$	405,435					25.5		%
Homebuilding gross margin percentage			23.3		%										21.9		%
Adjusted homebuilding gross margin percentage			26.8		%										25.5		%

Page 10

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RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)

(unaudited)

 

The following table reconciles the Company’s ratio of homebuilding debt-to-capital to the non-GAAP ratio of net homebuilding debt-to-net capital. We believe that the ratio of net homebuilding 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, 2024						December 31, 2023
Loans payable			$	283,929					$	288,337
Senior notes			646,030						1,094,249
Mortgage repurchase facilities			32,096						—
Total debt			962,055						1,382,586
Less: mortgage repurchase facilities			(32,096)						—
Total homebuilding debt			929,959						1,382,586
Stockholders’ equity			3,139,484						3,010,958
Total capital			$	4,069,443					$	4,393,544
Ratio of homebuilding debt-to-capital(1)			22.9		%				31.5		%
Total homebuilding debt			$	929,959					$	1,382,586
Less: Cash and cash equivalents			(492,940)						(868,953)
Net homebuilding debt			437,019						513,633
Stockholders’ equity			3,139,484						3,010,958
Net capital			$	3,576,503					$	3,524,591
Ratio of net homebuilding debt-to-net capital(2)			12.2		%				14.6		%

__________

(1)    The ratio of homebuilding debt-to-capital is computed as the quotient obtained by dividing total homebuilding debt by the sum of total homebuilding debt plus stockholders’ equity.

(2)    The ratio of net homebuilding debt-to-net capital is computed as the quotient obtained by dividing net homebuilding debt (which is total homebuilding debt less cash and cash equivalents) by the sum of net homebuilding debt plus stockholders’ equity.

Page 11

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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 June 30,												Six Months Ended June 30,
			2024						2023						2024						2023
			(in thousands)
Net income available to common stockholders			$	118,002					$	60,724					$	217,057					$	135,466
Interest expense:
Interest incurred			30,378						37,394						66,534						74,873
Interest capitalized			(30,378)						(37,394)						(66,534)						(74,873)
Amortization of interest in cost of sales			39,164						25,681						70,010						45,932
Provision for income taxes			41,227						21,472						72,811						48,822
Depreciation and amortization			7,697						6,128						15,024						13,182
EBITDA			206,090						114,005						374,902						243,402
Amortization of stock-based compensation			8,940						4,162						15,619						8,023
Impairments and lot option abandonments			968						11,761						1,370						12,478
Adjusted EBITDA			$	215,998					$	129,928					$	391,891					$	263,903

 

Page 12

Cover Page	Jul. 25, 2024
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jul. 25, 2024
Entity Registrant Name	Tri Pointe Homes, Inc.
Entity Incorporation, State or Country Code	DE
Entity File Number	1-35796
Entity Tax Identification Number	61-1763235
Entity Address, Address Line One	940 Southwood Blvd
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Incline Village
Entity Address, State or Province	NV
Entity Address, Postal Zip Code	89451
City Area Code	775
Local Phone Number	413-1030
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Common Stock, par value $0.01 per share
Trading Symbol	TPH
Security Exchange Name	NYSE
Entity Emerging Growth Company	false
Entity Central Index Key	0001561680
Amendment Flag	false

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