Tri Pointe Homes, Inc. Reports 2021 Third Quarter Results

October 21, 2021

-Diluted Earnings Per Share of $1.17-
-Homebuilding Gross Margin Percentage of 26.3%-
-Monthly Absorption Rate of 4.1-
-Backlog Units up 14% Year-Over-Year-
-Backlog Dollar Value up 17% Year-Over-Year-

INCLINE VILLAGE, Nev., Oct. 21, 2021 (GLOBE NEWSWIRE) -- Tri Pointe Homes, Inc. (the “Company”) (NYSE:TPH) today announced results for the third quarter ended September 30, 2021.

“Tri Pointe Homes generated a significant year-over-year increase in profitability in the third quarter of 2021, driven by strong revenue growth and margin expansion,” said Doug Bauer, Chief Executive Officer of Tri Pointe Homes. “Our teams did an excellent job navigating the supply chain issues that persist in our industry, enabling us to post a 25% year-over-year increase in deliveries. With the strong pricing power we have experienced this year, our homebuilding gross margin was 26.3% for the quarter, which is a record for our company. The combination of increased deliveries and greater margins resulted in net income of $133.2 million for the quarter, or $1.17 per diluted share, representing year-over-year growth of 69% and 92%, respectively.”

Mr. Bauer continued, “Our return on average tangible equity was 20.8%* on a trailing twelve-month basis following our third quarter results, representing a 650-basis-point improvement over the same period last year. Our steadily improving return profile has been driven in large part by several strategic initiatives we have implemented, which include better asset turns, a more land-light strategy, consistent share repurchases, the maturation of our early-stage divisions and enhanced operational and process improvements. We have been extremely pleased with the way these initiatives have led to meaningful improvements to our return on average tangible equity and believe the strategic changes we have made will continue to benefit our stockholders.”

Mr. Bauer concluded, “With a robust backlog, a healthy demand outlook and a strong balance sheet, Tri Pointe Homes is poised to finish 2021 on a high note and carry that momentum into 2022. We believe a number of the demand drivers that are currently in place should persist for the foreseeable future, creating an excellent operating environment for our company. As a result, we are extremely optimistic about the future of Tri Pointe Homes.”

Results and Operational Data for Third Quarter 2021 and Comparisons to Third Quarter 2020

  • Net income was $133.2 million, or $1.17 per diluted share, compared to $78.7 million, or $0.61 per diluted share.
  • Home sales revenue of $1.0 billion compared to $826.0 million, an increase of 25%
    • New home deliveries of 1,632 homes compared to 1,303 homes, an increase of 25%
    • Average sales price of homes delivered of $630,000 compared to $634,000, a decrease of 1%
  • Homebuilding gross margin percentage of 26.3% compared to 22.1%, an increase of 420 basis points
    • Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 28.8%**
  • SG&A expense as a percentage of homes sales revenue of 9.6% compared to 9.8%, a decrease of 20 basis points
  • Net new home orders of 1,349 compared to 1,933, a decrease of 30%
  • Active selling communities averaged 109.0 compared to 134.0, a decrease of 19%
    • Net new home orders per average selling community were 12.4 orders (4.1 monthly) compared to 14.4 orders (4.8 monthly)
    • Cancellation rate of 9% in each period
  • Backlog units at quarter end of 3,619 homes compared to 3,188, an increase of 14%
    • Dollar value of backlog at quarter end of $2.4 billion compared to $2.1 billion, an increase of 17%
    • Average sales price of homes in backlog at quarter end of $671,000 compared to $648,000, an increase of 4%
  • Ratios of debt-to-capital and net debt-to-net capital of 36.3% and 24.3%**, respectively, as of September 30, 2021
  • Repurchased 2,974,328 shares of common stock at a weighted average price per share of $21.93 for an aggregate dollar amount of $65.2 million in the three months ended September 30, 2021
  • Ended the third quarter of 2021 with total liquidity of $1.2 billion, including cash and cash equivalents of $587.4 million and $589.9 million of availability under the Company’s unsecured revolving credit facility

* Return on average tangible equity is calculated as net income for the trailing twelve months divided by average stockholders’ equity less goodwill and other intangible assets for the trailing five quarters
** See “Reconciliation of Non-GAAP Financial Measures”

“We continued to see excellent demand for our homes during the third quarter of 2021, as evidenced by our sales pace of 4.1 orders per community per month,” said Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “The order activity was broad-based both in terms of geography and price point, a sign that there is wide-ranging appeal for our premium brand and innovative new home designs. We intend to capitalize on this continued demand by opening over 100 new communities through the next five quarters and expect to end 2022 with approximately 40% more active communities than the previous year. We are excited about our growth prospects in the coming quarters and believe we are in a great position to benefit from the strong housing fundamentals that continue to drive new home demand.”

Outlook

For the full year, the Company expects to open approximately 70 new communities and end the year with between 110 and 115 active selling communities. In addition, the Company anticipates delivering between 6,000 and 6,300 homes at an average sales price between $635,000 and $640,000. The Company expects homebuilding gross margin percentage to be in the range of 24.5% to 25.0% for the full year and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 9.8% to 10.2%. Finally, the Company expects its effective tax rate for the full year to be approximately 25%.

Earnings Conference Call

The Company will host a conference call via live webcast for investors and other interested parties beginning at 10:00 a.m. Eastern Time on Thursday, October 21, 2021.  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 slides on the Internet under the Events & Presentations heading in the Investors section of the Company’s website at presentation slides on the internet through the Investors section of the Company’s website at www.TriPointeHomes.com. Listeners should go to the website at least fifteen minutes prior to the call to download and install any necessary audio software. The call can also be accessed toll free at (877) 407-3982, or (201) 493-6780 for international participants. Participants should ask for the Tri Pointe Homes Third Quarter 2021 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 13723766. 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® (NYSE: TPH) is a publicly traded company and a recognized leader in customer experience, innovative design, and environmentally responsible business practices. The company builds premium homes and communities in 10 states, with deep ties to the communities it serves—some for as long as a century. Tri Pointe Homes combines the financial resources, technology platforms and proven leadership of a national organization with the regional insights, longstanding community connections and agility of empowered local teams. Tri Pointe has won multiple Builder of the Year awards, most recently in 2019, and made Fortune magazine’s 2017 100 Fastest-Growing Companies list. Named one of the Best Places to Work by the Orange County Business Journal for four consecutive years, Tri Pointe Homes also became a Great Place to Work-CertifiedTM company in 2021. 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 the ongoing COVID-19 pandemic, which are highly uncertain and subject to rapid change, cannot be predicted and will depend upon future developments, including the emergence and spread of new strains or variants of COVID-19, the severity and the duration of the outbreak, the duration of existing and future social distancing and shelter-in-place orders, further mitigation strategies taken by applicable government authorities, the availability and acceptance of effective vaccines, 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 effects 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; the prices and availability of supply chain inputs, including raw materials, and labor; 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 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, civil unrest or outbreaks of contagious diseases, 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:

Drew Mackintosh, Mackintosh Investor Relations
InvestorRelations@TriPointeHomes.com, 949-478-8696

Media Contact:

Carol Ruiz, cruiz@newgroundco.com, 310-437-0045
  

KEY OPERATIONS AND FINANCIAL DATA
(dollars in thousands)
(unaudited)

  Three Months Ended September 30,   Nine Months Ended September 30,
  2021   2020   Change   % Change   2021   2020   Change   % Change
Operating Data: (unaudited)
Home sales revenue $ 1,028,950     $ 826,036     $ 202,914       25   %   $ 2,754,932     $ 2,187,816     $ 567,116       26   %
Homebuilding gross margin $ 270,926     $ 182,580     $ 88,346       48   %   $ 690,337     $ 470,044     $ 220,293       47   %
Homebuilding gross margin % 26.3 %   22.1 %   4.2   %       25.1 %   21.5 %   3.6   %    
Adjusted homebuilding gross margin %* 28.8 %   25.0 %   3.8   %       27.9 %   24.4 %   3.5   %    
SG&A expense $ 98,365     $ 81,037     $ 17,328       21   %   $ 276,926     $ 246,259     $ 30,667       12   %
SG&A expense as a % of home sales
revenue
9.6 %   9.8 %   (0.2 ) %       10.1 %   11.3 %   (1.2 ) %    
Net income $ 133,156     $ 78,682     $ 54,474       69   %   $ 321,827     $ 167,093     $ 154,734       93   %
Adjusted EBITDA* $ 215,880     $ 140,792     $ 75,088       53   %   $ 543,945     $ 329,519     $ 214,426       65   %
Interest incurred $ 24,280     $ 20,063     $ 4,217       21   %   $ 68,017     $ 62,670     $ 5,347       9   %
Interest in cost of home sales $ 25,656     $ 23,495     $ 2,161       9   %   $ 77,185     $ 62,118     $ 15,067       24   %
                               
Other Data:                              
Net new home orders 1,349     1,933     (584 )     (30 ) %   4,958     4,926     32       1   %
New homes delivered 1,632     1,303     329       25   %   4,303     3,490     813       23   %
Average sales price of homes delivered $ 630     $ 634     $ (4 )     (1 ) %   $ 640     $ 627     $ 13       2   %
Cancellation rate 9 %   9 %   0   %       7 %   14 %   (7 ) %    
Average selling communities 109.0     134.0     (25.0 )     (19 ) %   112.1     138.8     (26.7 )     (19 ) %
Selling communities at end of period 109     126     (17 )     (13 ) %                
Backlog (estimated dollar value) $ 2,428,412     $ 2,067,366     $ 361,046       17   %                
Backlog (homes) 3,619     3,188     431       14   %                
Average sales price in backlog $ 671     $ 648     $ 23       4   %                
                               
  September 30,   December 31,                        
  2021   2020   Change   % Change                
Balance Sheet Data: (unaudited)                            
Cash and cash equivalents $ 587,405     $ 621,295     $ (33,890 )     (5 ) %                
Real estate inventories $ 3,136,477     $ 2,910,142     $ 226,335       8   %                
Lots owned or controlled 38,777     35,641     3,136       9   %                
Homes under construction (1) 4,097     3,044     1,053       35   %                
Homes completed, unsold 18     68     (50 )     (74 ) %                
Debt $ 1,343,782     $ 1,343,001     $ 781       0   %                
Stockholders’ equity $ 2,354,136     $ 2,232,537     $ 121,599       5   %                
Book capitalization $ 3,697,918     $ 3,575,538     $ 122,380       3   %                
Ratio of debt-to-capital 36.3 %   37.6 %   (1.3 ) %                    
Ratio of net debt-to-net capital* 24.3 %   24.4 %   (0.1 ) %                    

 

(1) Homes under construction included 83 and 86 models at September 30, 2021 and December 31, 2020, respectively.
* See “Reconciliation of Non-GAAP Financial Measures”

 

 

CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share amounts)

  September 30,   December 31,
  2021   2020
Assets (unaudited)    
Cash and cash equivalents $ 587,405     $ 621,295  
Receivables 86,926     63,551  
Real estate inventories 3,136,477     2,910,142  
Investments in unconsolidated entities 75,046     75,056  
Goodwill and other intangible assets, net 156,603     158,529  
Deferred tax assets, net 43,618     47,525  
Other assets 147,610     145,882  
Total assets $ 4,233,685     $ 4,021,980  
       
Liabilities      
Accounts payable $ 119,699     $ 79,690  
Accrued expenses and other liabilities 416,056     366,740  
Loans payable 257,381     258,979  
Senior notes 1,086,401     1,084,022  
Total liabilities 1,879,537     1,789,431  
       
Commitments and contingencies      
       
Equity      
Stockholders’ equity:      
Preferred stock, $0.01 par value, 50,000,000 shares authorized; no shares issued and outstanding as of September 30, 2021 and December 31, 2020, respectively      
Common stock, $0.01 par value, 500,000,000 shares authorized; 112,386,496 and 121,882,778 shares issued and outstanding at September 30, 2021 and December 31, 2020, respectively 1,124     1,219  
Additional paid-in capital 145,004     345,137  
Retained earnings 2,208,008     1,886,181  
Total stockholders’ equity 2,354,136     2,232,537  
Noncontrolling interests 12     12  
Total equity 2,354,148     2,232,549  
Total liabilities and equity $ 4,233,685     $ 4,021,980  



CONSOLIDATED STATEMENT OF OPERATIONS
(in thousands, except share and per share amounts)
(unaudited)

  Three Months Ended September 30,   Nine Months Ended September 30,
  2021   2020   2021   2020
Homebuilding:              
Home sales revenue $ 1,028,950       $ 826,036       $ 2,754,932       $ 2,187,816    
Land and lot sales revenue 581       3,242       7,520       3,462    
Other operations revenue 646       634       1,969       1,900    
Total revenues 1,030,177       829,912       2,764,421       2,193,178    
Cost of home sales 758,024       643,456       2,064,595       1,717,772    
Cost of land and lot sales 891       3,214       5,918       3,790    
Other operations expense 801       624       2,111       1,872    
Sales and marketing 44,875       44,714       130,824       132,545    
General and administrative 53,490       36,323       146,102       113,714    
Restructuring charges       54             5,603    
Homebuilding income from operations 172,096       101,527       414,871       217,882    
Equity in (loss) income of unconsolidated entities (43 )     106       (72 )     67    
Other income (loss), net 171       (3,120 )     428       (9,075 )  
Homebuilding income before income taxes 172,224       98,513       415,227       208,874    
Financial Services:              
Revenues 3,016       2,552       7,802       6,442    
Expenses 1,618       1,334       4,510       3,698    
Equity in income of unconsolidated entities 3,946       3,273       10,586       7,761    
Financial services income before income taxes 5,344       4,491       13,878       10,505    
Income before income taxes 177,568       103,004       429,105       219,379    
Provision for income taxes (44,412 )     (24,322 )     (107,278 )     (52,286 )  
Net income $ 133,156       $ 78,682       $ 321,827       $ 167,093    
Earnings per share              
Basic $ 1.18       $ 0.61       $ 2.77       $ 1.27    
Diluted $ 1.17       $ 0.61       $ 2.75       $ 1.27    
Weighted average shares outstanding              
Basic 112,781,663       128,941,901       116,296,265       131,190,301    
Diluted 113,782,251       129,515,114       117,188,893       131,672,652    



MARKET DATA BY REPORTING SEGMENT & STATE
(dollars in thousands)
(unaudited)

  Three Months Ended September 30,   Nine Months Ended September 30,
  2021   2020   2021   2020
  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 187     $ 685     170     $ 559     570     $ 667     475     $ 534  
California 708     646     481     729     1,863     674     1,310     740  
Nevada 180     611     132     563     381     607     321     534  
Washington 76     983     78     927     223     984     170     897  
West total 1,151     669     861     686     3,037     687     2,276     679  
Colorado 55     589     47     625     154     584     166     593  
Texas 274     492     235     454     721     483     698     628  
Central total 329     508     282     482     875     501     864     489  
Maryland 73     565     98     578     203     561     228     567  
North Carolina 18     395             53     393          
South Carolina 7     362             11     334          
Virginia 54     749     62     684     124     737     122     736  
East total 152     601     160     619     391     588     350     626  
Total 1,632     $ 630     1,303     $ 634     4,303     $ 640     3,490     $ 627  
                               
  Three Months Ended September 30,   Nine Months Ended September 30,
  2021   2020   2021   2020
  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     13.2     244     18.7     676     14.4     646     17.4  
California 545     38.3     895     45.2     1,865     38.9     2,157     51.1  
Nevada 133     10.2     145     15.5     568     11.1     413     15.3  
Washington 68     6.5     78     8.5     229     5.7     309     8.2  
West total 928     68.2     1,362     87.9     3,338     70.1     3,525     92.0  
Colorado 55     6.5     72     4.3     218     5.7     181     4.2  
Texas 238     21.5     318     30.5     945     22.6     757     30.3  
Central total 293     28.0     390     34.8     1,163     28.3     938     34.5  
Maryland 40     4.3     131     8.0     149     5.3     334     8.8  
North Carolina 25     1.5             91     1.6          
South Carolina 16     1.5     6     0.3     38     1.5     6     0.1  
Virginia 47     5.5     44     3.0     179     5.3     123     3.4  
East total 128     12.8     181     11.3     457     13.7     463     12.3  
Total 1,349     109.0     1,933     134.0     4,958     112.1     4,926     138.8  



MARKET DATA BY REPORTING SEGMENT & STATE, continued
(dollars in thousands)
(unaudited)

  As of September 30, 2021   As of September 30, 2020
  Backlog
Units
  Backlog
Dollar
Value
  Average
Sales
Price
  Backlog
Units
  Backlog
Dollar
Value
  Average
Sales
Price
Arizona 585     $ 438,093     $ 749     501     $ 317,887     $ 635  
California 1,260     843,994     670     1,399     941,768     673  
Nevada 323     226,035     700     229     148,899     650  
Washington 145     155,172     1,070     228     222,394     975  
West total 2,313     1,663,294     719     2,357     1,630,948     692  
Colorado 190     135,851     715     115     65,576     570  
Texas 722     364,537     505     404     184,507     457  
Central total 912     500,388     549     519     250,083     482  
Maryland 147     92,836     632     223     122,133     548  
North Carolina 50     23,170     463              
South Carolina 30     11,188     373     6     1,851     309  
Virginia 167     137,536     824     83     62,351     751  
East total 394     264,730     672     312     186,335     597  
Total 3,619     $ 2,428,412     $ 671     3,188     $ 2,067,366     $ 648  
                       
  September 30,   December 31,                
  2021   2020                
Lots Owned or Controlled:                      
Arizona 3,750     4,128                  
California 14,690     15,040                  
Nevada 2,304     2,639                  
Washington 857     964                  
West total 21,601     22,771                  
Colorado 1,451     1,080                  
Texas 11,068     6,985                  
Central total 12,519     8,065                  
Maryland 693     892                  
North Carolina 2,924     2,808                  
South Carolina 163     106                  
Virginia 877     999                  
East total 4,657     4,805                  
Total 38,777     35,641                  
                       
  September 30,   December 31,                
  2021   2020                
Lots by Ownership Type:                      
Lots owned 22,333     22,620                  
Lots controlled (1) 16,444     13,021                  
Total 38,777     35,641                  

 

(1) As of September 30, 2021 and December 31, 2020, lots controlled included lots that were under land option contracts or purchase contracts. As of September 30, 2021, lots controlled for Central and East include 2,095 lots and 179 lots, respectively, which represent our expected share of lots owned by our unconsolidated land development joint ventures.



RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(unaudited)

In this press release, we utilize certain financial measures that are non-GAAP financial measures as defined by the Securities and Exchange Commission. We present these measures because we believe they and similar measures are useful to management and investors in evaluating the Company’s operating performance and financing structure. We also believe these measures facilitate the comparison of our operating performance and financing structure with other companies in our industry. Because these measures are not calculated in accordance with Generally Accepted Accounting Principles (“GAAP”), they may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

The following tables reconcile homebuilding gross margin percentage, as reported and prepared in accordance with GAAP, to the non-GAAP measure adjusted homebuilding gross margin percentage. We believe this information is meaningful as it isolates the impact that leverage has on homebuilding gross margin and permits investors to make better comparisons with our competitors, who adjust gross margins in a similar fashion.

  Three Months Ended September 30,
  2021   %   2020   %
  (dollars in thousands)
Home sales revenue $ 1,028,950     100.0 %   $ 826,036     100.0 %
Cost of home sales 758,024     73.7 %   643,456     77.9 %
Homebuilding gross margin 270,926     26.3 %   182,580     22.1 %
Add:  interest in cost of home sales 25,656     2.5 %   23,495     2.8 %
Add:  impairments and lot option abandonments 268     0.0 %   315     0.0 %
Adjusted homebuilding gross margin $ 296,850     28.8 %   $ 206,390     25.0 %
Homebuilding gross margin percentage 26.3 %       22.1 %    
Adjusted homebuilding gross margin percentage 28.8 %       25.0 %    

 

  Nine Months Ended September 30,
  2021   %   2020   %
  (dollars in thousands)
Home sales revenue $ 2,754,932     100.0 %   $ 2,187,816     100.0 %
Cost of home sales 2,064,595     74.9 %   1,717,772     78.5 %
Homebuilding gross margin 690,337     25.1 %   470,044     21.5 %
Add:  interest in cost of home sales 77,185     2.8 %   62,118     2.8 %
Add:  impairments and lot option abandonments 713     0.0 %   2,044     0.1 %
Adjusted homebuilding gross margin $ 768,235     27.9 %   $ 534,206     24.4 %
Homebuilding gross margin percentage 25.1 %       21.5 %    
Adjusted homebuilding gross margin percentage 27.9 %       24.4 %    



RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued)
(unaudited)

The following table reconciles the Company’s ratio of debt-to-capital to the non-GAAP ratio of net debt-to-net capital. We believe that the ratio of net debt-to-net capital is a relevant financial measure for management and investors to understand the leverage employed in our operations and as an indicator of the Company’s ability to obtain financing.

  September 30, 2021   December 31, 2020
Loans payable $ 257,381       $ 258,979    
Senior notes 1,086,401       1,084,022    
Total debt 1,343,782       1,343,001    
Stockholders’ equity 2,354,136       2,232,537    
Total capital $ 3,697,918       $ 3,575,538    
Ratio of debt-to-capital(1) 36.3   %   37.6   %
       
Total debt $ 1,343,782       $ 1,343,001    
Less: Cash and cash equivalents (587,405 )     (621,295 )  
Net debt 756,377       721,706    
Stockholders’ equity 2,354,136       2,232,537    
Net capital $ 3,110,513       $ 2,954,243    
Ratio of net debt-to-net capital(2) 24.3   %   24.4   %

 

(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.

 

 

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, (f) impairments and lot option abandonments, (g) early loan termination costs and (h) restructuring charges. Other companies may calculate EBITDA and Adjusted EBITDA (or similarly titled measures) differently. We believe EBITDA and Adjusted EBITDA are useful measures of the Company’s ability to service debt and obtain financing.

  Three Months Ended September 30,   Nine Months Ended September 30,
  2021   2020   2021   2020
  (in thousands)
Net income $ 133,156       $ 78,682       $ 321,827       $ 167,093    
Interest expense:              
Interest incurred 24,280       20,063       68,017       62,670    
Interest capitalized (24,280 )     (20,063 )     (68,017 )     (62,670 )  
Amortization of interest in cost of sales 25,655       23,538       77,457       62,166    
Provision for income taxes 44,412       24,322       107,278       52,286    
Depreciation and amortization 7,979       7,020       24,098       19,196    
EBITDA 211,202       133,562       530,660       300,741    
Amortization of stock-based compensation 4,410       3,477       12,572       10,888    
Impairments and lot option abandonments 268       315       713       2,044    
Early loan termination costs       3,384             10,243    
Restructuring charges       54             5,603    
Adjusted EBITDA $ 215,880       $ 140,792       $ 543,945       $ 329,519    

 


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Source: Tri Pointe Homes, Inc.
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INCLINE VILLAGE, NV: 940 Southwood Blvd, Suite 200, Incline Village, NV 89451 | 775-413-1030

IRVINE, CA: 19540 Jamboree Road, Suite 300, Irvine, CA 92612 | 949-438-1400

info@TriPointeHomes.com

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