Document
false0001561680 0001561680 2020-04-22 2020-04-22


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) April 22, 2020
_______________________________________________________________________________________
TRI Pointe Group, 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.)
             
19540 Jamboree Road, Suite 300
Irvine, California 92612
(Address of principal executive offices) (Zip Code)
Registrant’s telephone number, including area code (949438-1400
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 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.

1



Item 2.02
Results of Operations and Financial Condition  

On April 23, 2020, TRI Pointe Group, Inc., a Delaware corporation (the “Company”), announced in a press release its financial results for the quarter ended March 31, 2020.  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 5.07     Submission of Matters to a Vote of Security Holders

The Company held its 2020 annual meeting of stockholders on April 22, 2020 (the “Annual Meeting”). A total of 124,023,649 shares of the Company’s common stock were present or represented by proxy at the Annual Meeting, representing more than 92% of the Company’s shares outstanding as of the March 3, 2020 record date. The matters submitted for a stockholder vote and the related results are set forth below.
Proposal No. 1—Election of six nominees to serve as directors:
Director
Votes
For
Votes
Against
Votes
Abstained
Broker
Non-Votes
Douglas F. Bauer
117,871,590
989,213
76,984
5,085,862
Lawrence B. Burrows
117,427,725
1,431,943
78,119
5,085,862
Daniel S. Fulton
117,870,958
987,691
79,139
5,085,861
Steven J. Gilbert
115,114,041
3,746,087
77,659
5,085,862
Vicki D. McWilliams
118,205,658
659,124
73,006
5,085,861
Constance B. Moore
118,040,814
824,268
72,706
5,085,861

Proposal No. 2—Non-binding, advisory vote on the compensation of the Company’s named executive officers:
Votes
For
Votes
Against
Votes
Abstained
Broker
Non-Votes
117,166,042
1,668,101
103,644
5,085,862

Proposal No. 3—Non-binding, advisory vote on the frequency of future advisory votes to approve the compensation of the Company’s named executive officers:
Votes For
Every One Year
Votes For
Every Two Years
Votes For
Every Three Years
Votes
Abstained
Broker
Non-Votes
107,138,687
32,708
11,663,105
103,287
5,085,862

Proposal No. 4—Ratification of the appointment of Ernst & Young LLP as the Company’s independent registered public accounting firm for the 2020 fiscal year:
Votes
For
Votes
Against
Votes
Abstained
122,857,729
1,122,876
43,044
Based on the foregoing votes, all six nominees were elected and Proposals No. 2 and No. 4 were approved. In light of the vote with respect to Proposal No. 3, the Company has determined to include an advisory vote on the compensation of the Company’s named executive officers in its proxy materials every year until the next required vote on the frequency of the advisory vote on the compensation of the Company’s named executive officers.


2



Item 9.01
Exhibits

(d)
Exhibits
Press Release dated April 23, 2020
104
Cover Page Interactive Data File, formatted in Inline XBRL



3



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 Group, Inc.
 
 
 
Date: April 23, 2020
By:
/s/ Glenn J. Keeler
 
 
Glenn J. Keeler,
Chief Financial Officer and Treasurer


4
Exhibit
Exhibit 99.1



TRI POINTE GROUP, INC. REPORTS 2020 FIRST QUARTER RESULTS

-New Home Orders up 26% Year-Over-Year-
-Backlog Dollar Value up 31% Year-Over-Year-
-Homebuilding Gross Margin Percentage of 20.5%-
-Diluted Earnings Per Share of $0.24-
-Ended the Quarter with $678 Million of Total Liquidity-
IRVINE, CALIFORNIA, April 23, 2020 / Business Wire / TRI Pointe Group, Inc. (the “Company”) (NYSE:TPH) today announced results for the first quarter ended March 31, 2020.
“While I am extremely pleased with our results this quarter, TRI Pointe Group’s primary focus over the past several weeks has been the health and well-being of its employees, trade partners and customers since the outbreak of COVID-19,” said TRI Pointe Group Chief Executive Officer Doug Bauer. “As soon as the threat of the virus became evident, we adjusted our business practices to substantially limit in-person interaction and promote social distancing. Overcoming this pandemic will require everyone’s collective efforts to stop the spread of the virus, and TRI Pointe is dedicated to doing its part.”
Mr. Bauer continued, “The measures we’ve taken as a nation to combat the virus will no doubt have a lasting impact on the economy and our industry. Fortunately, TRI Pointe enters this period of uncertainty in a position of relative strength, with a quarter-end net debt-to-net capital ratio of 35.4% and over $670 million in cash and available liquidity. This financial strength, coupled with the experience of our seasoned leadership team in navigating through difficult times, gives me confidence that TRI Pointe is well positioned to deal with the current market environment.”
Mr. Bauer concluded, “From a macro perspective, I remain optimistic about the long-term outlook for our industry post COVID-19. The demographic shifts occurring in this country have created a need for more housing, while the supply of existing homes remains low. These two factors, along with my belief in the resiliency of the American economy, give me confidence in the future of our industry and TRI Pointe in particular.”
Results and Operational Data for First Quarter 2020 and Comparisons to First Quarter 2019
Net income was $31.9 million, or $0.24 per diluted share, compared to $71,000, or $0.00 per diluted share
Home sales revenue of $594.8 million compared to $492.7 million, an increase of 21%
New home deliveries of 958 homes compared to 814 homes, an increase of 18%
Average sales price of homes delivered of $621,000 compared to $605,000, an increase of 3%
Homebuilding gross margin percentage of 20.5% compared to 14.4%, an increase of 610 basis points
Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 23.4%*
SG&A expense as a percentage of homes sales revenue of 13.9% compared to 15.7%, a decrease of 180 basis points
Net new home orders of 1,661 compared to 1,321, an increase of 26%
Active selling communities averaged 140.8 compared to 147.8, a decrease of 5%
New home orders per average selling community were 11.8 orders (3.9 monthly) compared to 8.9 orders (3.0 monthly)
Cancellation rate of 13% compared to 15%
Backlog units at quarter end of 2,455 homes compared to 1,842, an increase of 33%
Dollar value of backlog at quarter end of $1.6 billion compared to $1.2 billion, an increase of 31%

Page 1


Average sales price of homes in backlog at quarter end of $659,000 compared to $672,000, a decrease of 2%
Ratios of debt-to-capital and net debt-to-net capital of 45.8% and 35.4%*, respectively, as of March 31, 2020
Repurchased 6,558,323 shares of common stock at a weighted average price per share of $15.55 for an aggregate dollar amount of $102.0 million in the three months ended March 31, 2020
Ended the first quarter of 2020 with total liquidity of $677.5 million, including cash and cash equivalents of $624.1 million and $53.4 million of availability under the Company’s unsecured revolving credit facility
 
*    See “Reconciliation of Non-GAAP Financial Measures”
“I am extremely pleased with how our team members have adapted to the new reality brought on by the pandemic,” said TRI Pointe Group President and Chief Operating Officer Tom Mitchell. “We continue to effectively manage all aspects of the business on a day-to-day basis. I am proud that our teams continue to find creative ways to satisfy our customers through sales, construction and service. In many ways, the changes we’ve had to make as an industry play to TRI Pointe’s strengths, thanks to the investments we’ve made in our digital platform. Our ability to market and sell our homes using virtual tools has allowed us to continue to generate sales leads and convert web traffic into orders in this environment.  In addition, we have provided customers with alternatives to conduct their new home closing, from curbside and window signing, to limited power of attorney with their settlement agent and remote online notarization.  We believe our online presence will be a significant asset during this time of limited or no in-person interaction and will have an enduring cost-benefit to our business going forward.”
Outlook
Due to the uncertainty regarding the effects of the COVID-19 pandemic on both the U.S. economy and the Company’s business operations and financial performance, the Company has withdrawn its previously issued guidance for fiscal 2020.
Earnings Conference Call
The Company will host a conference call via live webcast for investors and other interested parties beginning at 5:00 p.m. Eastern Time on Thursday, April 23, 2020.  The call will be hosted by Doug Bauer, Chief Executive Officer, Tom Mitchell, President and Chief Operating Officer, and Glenn Keeler, Chief Financial Officer.
Interested parties can listen to the call live and view the related presentation slides on the internet through the Investors section of the Company’s website at www.TRIPointeGroup.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 by dialing 1-877-407-3982 for domestic participants or 1-201-493-6780 for international participants. Participants should ask for the TRI Pointe Group First Quarter 2020 Earnings Conference Call. Those dialing in should do so at least ten minutes prior to the start. The replay of the call will be available for two weeks following the call.  To access the replay, the domestic dial-in number is 1-844-512-2921, the international dial-in number is 1-412-317-6671, and the reference code is #13701509.  An archive of the webcast will be available on the Company’s website for a limited time.
About TRI Pointe Group®
Headquartered in Irvine, California, TRI Pointe Group, Inc. (NYSE: TPH) is a family of premium, regional homebuilders that designs, builds, and sells homes in major U.S. markets. As one of the top 10 largest public homebuilding companies based on revenue in the United States, TRI Pointe Group combines the resources, operational sophistication, and leadership of a national organization with the regional insights, community ties, and agility of local homebuilders. The TRI Pointe Group family includes Maracay® in Arizona, Pardee Homes® in California and Nevada, Quadrant Homes® in Washington, Trendmaker® Homes in Texas, TRI Pointe Homes® in California, Colorado and the Carolinas, and Winchester® Homes* in Maryland and Virginia. TRI Pointe Group was named 2019 Builder of the Year by Builder and Developer magazine, recognized in Fortune magazine’s 2017 100

Page 2


Fastest-Growing Companies list, and garnered the 2015 Builder of the Year Award by Builder magazine. The company was also named one of the Best Places to Work in Orange County by the Orange County Business Journal in 2016, 2017, 2018 and 2019. For more information, please visit www.TriPointeGroup.com.
*Winchester is a registered trademark and is used with permission.
Forward-Looking Statements
Various statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include, but are not limited to, statements regarding our strategy, projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects, and capital spending. Forward-looking statements that are included in this press release are generally accompanied by words such as “anticipate,” “believe,” “could,” “estimate,” “expect,” “future,” “goal,” “guidance,” “intend,” “likely,” “may,” “might,” “outlook,” “plan,” “potential,” “predict,” “project,” “should,” “strategy,” “target,” “will,” “would,” or other words that convey future events or outcomes. The forward-looking statements in this press release speak only as of the date of this press release, and we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. These forward-looking statements are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. The following factors, among others, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements: the effects of the ongoing COVID-19 pandemic, which are highly uncertain, cannot be predicted and will depend upon future developments, including the severity of COVID-19 and the duration of the outbreak, the duration of existing social distancing and shelter-in-place orders, further mitigation strategies taken by applicable government authorities, the availability of a vaccine, adequate testing and treatments and the prevalence of widespread immunity to COVID-19; the impacts on our supply chain, the health of our employees, service providers and trade partners, and the reactions of U.S. and global markets and their effects on consumer confidence and spending; the 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; the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such parcels; access to adequate capital on acceptable terms; geographic concentration of our operations, particularly within California; levels of competition; the successful execution of our internal performance plans, including restructuring and cost reduction initiatives; raw material and labor prices and availability; oil and other energy prices; the effect of U.S. trade policies, including the imposition of tariffs and duties on homebuilding products and retaliatory measures taken by other countries; the effect of weather, including the re-occurrence of drought conditions in California; the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, and shortages and price increases in labor or materials associated with such natural disasters; the risk of loss from acts of war, terrorism or outbreaks of contagious diseases, such as COVID-19; transportation costs; federal and state tax policies; the effect 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.

Page 3


Investor Relations Contact:
Chris Martin, TRI Pointe Group
Drew Mackintosh, Mackintosh Investor Relations
InvestorRelations@TRIPointeGroup.com, 949-478-8696
Media Contact:
Carol Ruiz, cruiz@newgroundco.com, 310-437-0045
  

 

Page 4


KEY OPERATIONS AND FINANCIAL DATA
(dollars in thousands)
(unaudited)
 
Three Months Ended March 31,
 
2020
 
2019
 
Change
 
% Change
Operating Data:
 
 
 
 
 
 
 
Home sales revenue
$
594,838

 
$
492,703

 
$
102,135

 
20.7
 %
Homebuilding gross margin
$
121,956

 
$
71,167

 
$
50,789

 
71.4
 %
Homebuilding gross margin %
20.5
%
 
14.4
%
 
6.1
 %
 

Adjusted homebuilding gross margin %*
23.4
%
 
18.4
%
 
5.0
 %
 

SG&A expense
$
82,474

 
$
77,586

 
$
4,888

 
6.3
 %
SG&A expense as a % of home sales
   revenue
13.9
%
 
15.7
%
 
(1.8
)%
 

Net income
$
31,883

 
$
71

 
$
31,812

 
44,805.6
 %
Adjusted EBITDA*
$
67,956

 
$
28,150

 
$
39,806

 
141.4
 %
Interest incurred
$
20,779

 
$
23,373

 
$
(2,594
)
 
(11.1
)%
Interest in cost of home sales
$
16,822

 
$
14,191

 
$
2,631

 
18.5
 %
 
 
 
 
 
 
 
 
Other Data:
 
 
 
 
 
 
 
Net new home orders
1,661

 
1,321

 
340

 
25.7
 %
New homes delivered
958

 
814

 
144

 
17.7
 %
Average sales price of homes delivered
$
621

 
$
605

 
$
16

 
2.6
 %
Cancellation rate
13
%
 
15
%
 
(2
)%
 
 
Average selling communities
140.8

 
147.8

 
(7.0
)
 
(4.7
)%
Selling communities at end of period
143

 
146

 
(3
)
 
(2.1
)%
Backlog (estimated dollar value)
$
1,618,481

 
$
1,237,838

 
$
380,643

 
30.8
 %
Backlog (homes)
2,455

 
1,842

 
613

 
33.3
 %
Average sales price in backlog
$
659

 
$
672

 
$
(13
)
 
(1.9
)%
 
 
 
 
 
 
 
 
 
March 31,
 
December 31,
 
 
 
 
 
2020
 
2019
 
Change
 
% Change
Balance Sheet Data:
(unaudited)
 
 
 
 
 
 
Cash and cash equivalents
$
624,129

 
$
329,011

 
$
295,118

 
89.7
 %
Real estate inventories
$
3,194,148

 
$
3,065,436

 
$
128,712

 
4.2
 %
Lots owned or controlled
32,007

 
30,029

 
1,978

 
6.6
 %
Homes under construction (1)
2,564

 
2,269

 
295

 
13.0
 %
Homes completed, unsold
308

 
343

 
(35
)
 
(10.2
)%
Debt
$
1,784,925

 
$
1,283,985

 
$
500,940

 
39.0
 %
Stockholders’ equity
$
2,115,281

 
$
2,186,530

 
$
(71,249
)
 
(3.3
)%
Book capitalization
$
3,900,206

 
$
3,470,515

 
$
429,691

 
12.4
 %
Ratio of debt-to-capital
45.8
%
 
37.0
%
 
8.8
 %
 

Ratio of net debt-to-net capital*
35.4
%
 
30.4
%
 
5.0
 %
 

__________
(1)  
Homes under construction included 55 and 78 models at March 31, 2020 and December 31, 2019, respectively.
*
See “Reconciliation of Non-GAAP Financial Measures”

Page 5


CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)
 
 
March 31,
 
December 31,
 
2020
 
2019
Assets
(unaudited)
 
 
Cash and cash equivalents
$
624,129

 
$
329,011

Receivables
83,701

 
69,276

Real estate inventories
3,194,148

 
3,065,436

Investments in unconsolidated entities
11,091

 
11,745

Goodwill and other intangible assets, net
159,759

 
159,893

Deferred tax assets, net
46,266

 
49,904

Other assets
173,959

 
173,425

Total assets
$
4,293,053

 
$
3,858,690

 
 
 
 
Liabilities
 
 
 
Accounts payable
$
77,275

 
$
66,120

Accrued expenses and other liabilities
315,560

 
322,043

Loans payable
750,000

 
250,000

Senior notes
1,034,925

 
1,033,985

Total liabilities
2,177,760

 
1,672,148

 
 
 
 
Commitments and contingencies
 
 
 
 
 
 
 
Equity
 
 
 
Stockholdersequity:
 
 
 
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no
shares issued and outstanding as of March 31, 2020 and
December 31, 2019, respectively

 

Common stock, $0.01 par value, 500,000,000 shares authorized;
  130,236,981 and 136,149,633 shares issued and outstanding at
   March 31, 2020 and December 31, 2019, respectively
1,302

 
1,361

Additional paid-in capital
478,122

 
581,195

Retained earnings
1,635,857

 
1,603,974

Total stockholders equity
2,115,281

 
2,186,530

Noncontrolling interests
12

 
12

Total equity
2,115,293

 
2,186,542

Total liabilities and equity
$
4,293,053

 
$
3,858,690



 

Page 6


CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)
 
 
Three Months Ended March 31,
 
2020
 
2019
Homebuilding:
 

 
 

Home sales revenue
$
594,838

 
$
492,703

Land and lot sales revenue

 
1,029

Other operations revenue
618

 
598

Total revenues
595,456

 
494,330

Cost of home sales
472,882

 
421,536

Cost of land and lot sales
202

 
1,495

Other operations expense
624

 
590

Sales and marketing
42,637

 
38,989

General and administrative
39,837

 
38,597

Homebuilding income (loss) from operations
39,274

 
(6,877
)
Equity in loss of unconsolidated entities
(14
)
 
(25
)
Other income, net
373

 
6,241

Homebuilding income (loss) before income taxes
39,633

 
(661
)
Financial Services:
 
 
 
Revenues
1,594

 
302

Expenses
1,079

 
321

Equity in income of unconsolidated entities
1,556

 
775

Financial services income before income taxes
2,071

 
756

Income before income taxes
41,704

 
95

Provision for income taxes
(9,821
)
 
(24
)
Net income
$
31,883

 
$
71

Earnings per share
 
 
 

Basic
$
0.24

 
$
0.00

Diluted
$
0.24

 
$
0.00

Weighted average shares outstanding
 
 
 

Basic
134,361,148

 
141,865,270

Diluted
135,038,481

 
142,390,163

 
 

Page 7


MARKET DATA BY REPORTING SEGMENT & STATE
(dollars in thousands)
(unaudited)
 
 
Three Months Ended March 31,
 
2020
 
2019
 
New
Homes
Delivered
 
Average
Sales
Price
 
New
Homes
Delivered
 
Average
Sales
Price
New Homes Delivered:
 
 
 
 
 
 
 
Maracay
140

 
$
513

 
74

 
$
535

Pardee Homes
257

 
694

 
242

 
557

Quadrant Homes
52

 
836

 
44

 
983

Trendmaker Homes
209

 
460

 
154

 
455

TRI Pointe Homes
226

 
702

 
242

 
710

Winchester Homes
74

 
628

 
58

 
571

Total
958

 
$
621

 
814

 
$
605

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
2020
 
2019
 
New
Homes
Delivered
 
Average
Sales
Price
 
New
Homes
Delivered
 
Average
Sales
Price
New Homes Delivered:
 
 
 
 
 
 
 
California
339

 
$
763

 
328

 
$
679

Colorado
64

 
568

 
72

 
549

Maryland
55

 
561

 
38

 
466

Virginia
19

 
819

 
20

 
769

Arizona
140

 
513

 
74

 
535

Nevada
80

 
528

 
84

 
529

Texas
209

 
460

 
154

 
455

Washington
52

 
836

 
44

 
983

Total
958

 
$
621

 
814

 
$
605


 

Page 8


MARKET DATA BY REPORTING SEGMENT & STATE, continued
(unaudited)
 
 
Three Months Ended March 31,
 
2020
 
2019
 
Net New
Home
Orders
 
Average
Selling
Communities
 
Net New
Home
Orders
 
Average
Selling
Communities
Net New Home Orders:
 
 
 
 
 
 
 
Maracay
240

 
15.3

 
161

 
11.8

Pardee Homes
475

 
41.5

 
433

 
44.5

Quadrant Homes
126

 
7.0

 
75

 
7.2

Trendmaker Homes
234

 
30.2

 
243

 
39.3

TRI Pointe Homes
414

 
32.8

 
295

 
30.8

Winchester Homes
172

 
14.0

 
114

 
14.2

Total
1,661

 
140.8

 
1,321

 
147.8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Three Months Ended March 31,
 
2020
 
2019
 
Net New
Home
Orders
 
Average
Selling
Communities
 
Net New
Home
Orders
 
Average
Selling
Communities
Net New Home Orders:
 
 
 
 
 
 
 
California
664

 
55.6

 
517

 
54.7

Colorado
59

 
4.5

 
81

 
7.0

Maryland
123

 
10.0

 
84

 
9.8

Virginia
49

 
4.0

 
30

 
4.5

Arizona
240

 
15.3

 
161

 
11.8

Nevada
166

 
14.2

 
130

 
13.5

Texas
234

 
30.2

 
243

 
39.3

Washington
126

 
7.0

 
75

 
7.2

Total
1,661

 
140.8

 
1,321

 
147.8


 

Page 9


MARKET DATA BY REPORTING SEGMENT & STATE, continued
(dollars in thousands)
(unaudited)
 
 
As of March 31, 2020
 
As of March 31, 2019
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
Backlog:
 
 
 
 
 
 
 
 
 
 
 
Maracay
430

 
$
239,555

 
$
557

 
238

 
$
139,862

 
$
588

Pardee Homes
678

 
491,236

 
725

 
593

 
472,729

 
797

Quadrant Homes
163

 
145,873

 
895

 
77

 
75,599

 
982

Trendmaker Homes
370

 
183,012

 
495

 
402

 
196,256

 
488

TRI Pointe Homes
517

 
365,638

 
707

 
371

 
247,399

 
667

Winchester Homes
297

 
193,167

 
650

 
161

 
105,993

 
658

Total
2,455

 
$
1,618,481

 
$
659

 
1,842

 
$
1,237,838

 
$
672

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
As of March 31, 2020
 
As of March 31, 2019
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
 
Backlog
Units
 
Backlog
Dollar
Value
 
Average
Sales
Price
Backlog:
 
 
 
 
 
 
 
 
 
 
 
California
877

 
$
670,672

 
$
765

 
645

 
$
530,031

 
$
822

Colorado
95

 
56,278

 
592

 
153

 
86,570

 
566

Maryland
185

 
104,737

 
566

 
107

 
56,087

 
524

Virginia
112

 
88,430

 
790

 
54

 
49,906

 
924

Arizona
430

 
239,555

 
557

 
238

 
139,862

 
588

Nevada
223

 
129,924

 
583

 
166

 
103,527

 
624

Texas
370

 
183,012

 
495

 
402

 
196,256

 
488

Washington
163

 
145,873

 
895

 
77

 
75,599

 
982

Total
2,455

 
$
1,618,481

 
$
659

 
1,842

 
$
1,237,838

 
$
672



 

Page 10


MARKET DATA BY REPORTING SEGMENT & STATE, continued
(unaudited)
 
 
March 31,
 
December 31,
 
2020
 
2019
Lots Owned or Controlled(1):
 
 
 
Maracay
3,727

 
3,730

Pardee Homes
13,327

 
13,267

Quadrant Homes
1,051

 
1,103

Trendmaker Homes
5,398

 
4,034

TRI Pointe Homes
6,804

 
6,170

Winchester Homes
1,700

 
1,725

Total
32,007

 
30,029

 
 
 
 
 
 
 
 
 
March 31,
 
December 31,
 
2020
 
2019
Lots Owned or Controlled(1):
 
 
 
California
14,802

 
14,677

Colorado
1,133

 
1,033

Maryland
947

 
1,140

Virginia
753

 
585

Arizona
3,727

 
3,730

Nevada
2,133

 
2,026

North Carolina
2,010

 
1,590

South Carolina
53

 
111

Texas
5,398

 
4,034

Washington
1,051

 
1,103

Total
32,007

 
30,029

 
 
 
 
 
 
 
 
 
March 31,
 
December 31,
 
2020
 
2019
Lots by Ownership Type:
 
 
 
Lots owned
22,860

 
22,845

Lots controlled(1)
9,147

 
7,184

Total
32,007

 
30,029

__________
(1) 
As of March 31, 2020 and December 31, 2019, lots controlled included lots that were under land option contracts or purchase contracts.
 
 

Page 11


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 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,
 
2020
 
%
 
2019
 
%
 
(dollars in thousands)
Home sales revenue
$
594,838

 
100.0
%
 
$
492,703

 
100.0
%
Cost of home sales
472,882

 
79.5
%
 
421,536

 
85.6
%
Homebuilding gross margin
121,956

 
20.5
%
 
71,167

 
14.4
%
Add:  interest in cost of home sales
16,822

 
2.8
%
 
14,191

 
2.9
%
Add:  impairments and lot option abandonments
349

 
0.1
%
 
5,202

 
1.1
%
Adjusted homebuilding gross margin
$
139,127

 
23.4
%
 
$
90,560

 
18.4
%
Homebuilding gross margin percentage
20.5
%
 
 
 
14.4
%
 
 
Adjusted homebuilding gross margin percentage
23.4
%
 
 
 
18.4
%
 
 























Page 12


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, 2020
 
December 31, 2019
Loans payable
$
750,000

 
$
250,000

Senior notes
1,034,925

 
1,033,985

Total debt
1,784,925

 
1,283,985

Stockholders’ equity
2,115,281

 
2,186,530

Total capital
$
3,900,206

 
$
3,470,515

Ratio of debt-to-capital(1)
45.8
%
 
37.0
%
 


 


Total debt
$
1,784,925

 
$
1,283,985

Less: Cash and cash equivalents
(624,129
)
 
(329,011
)
Net debt
1,160,796

 
954,974

Stockholders’ equity
2,115,281

 
2,186,530

Net capital
$
3,276,077

 
$
3,141,504

Ratio of net debt-to-net capital(2)
35.4
%
 
30.4
%
__________
(1) 
The ratio of debt-to-capital is computed as the quotient obtained by dividing total debt by the sum of total debt plus stockholders’ equity.
(2) 
The ratio of net debt-to-net capital is computed as the quotient obtained by dividing net debt (which is total debt less cash and cash equivalents) by the sum of net debt plus stockholders’ equity.































Page 13


RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
(unaudited)
 
The following table calculates the non-GAAP financial measures of EBITDA and Adjusted EBITDA and reconciles those amounts to net income, as reported and prepared in accordance with GAAP.  EBITDA means net income before (a) interest expense, (b) expensing of previously capitalized interest included in costs of home sales, (c) income taxes and (d) depreciation and amortization. Adjusted EBITDA means EBITDA before (e) amortization of stock-based compensation 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,
 
2020
 
2019
 
(in thousands)
Net income
$
31,883

 
$
71

Interest expense:
 
 
 
Interest incurred
20,779

 
23,373

Interest capitalized
(20,779
)
 
(23,373
)
Amortization of interest in cost of sales
16,822

 
14,333

Provision for income taxes
9,821

 
24

Depreciation and amortization
5,456

 
5,085

EBITDA
63,982

 
19,513

Amortization of stock-based compensation
3,625

 
3,435

Impairments and lot option abandonments
349

 
5,202

Adjusted EBITDA
$
67,956

 
$
28,150

 
 
 
 
 
 
 
 
 
 
 

Page 14
v3.20.1
Cover Page
Apr. 22, 2020
Cover page.  
Document Type 8-K
Document Period End Date Apr. 22, 2020
Entity Registrant Name TRI Pointe Group, Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 1-35796
Entity Tax Identification Number 61-1763235
Entity Address, Address Line One 19540 Jamboree Road
Entity Address, Address Line Two Suite 300
Entity Address, City or Town Irvine
Entity Address, State or Province CA
Entity Address, Postal Zip Code 92612
City Area Code 949
Local Phone Number 438-1400
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