8-K

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 22, 2021

_______________________________________________________________________________________

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 (775) 413-1030

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. ☐

Item 2.02          Results of Operations and Financial Condition

On July 22, 2021, Tri Pointe Homes, Inc., a Delaware corporation (the “Company”), announced in a press release its financial results for the quarter ended June 30, 2021. 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 22, 2021

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 22, 2021	By:	/s/ Glenn J. Keeler
		Glenn J. Keeler, Chief Financial Officer and Treasurer

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EX-99.1

Exhibit 99.1

TRI POINTE HOMES, INC. REPORTS 2021 SECOND QUARTER RESULTS AND ANNOUNCES $250 MILLION INCREASE TO ITS STOCK REPURCHASE PROGRAM

-Net New Home Orders up 22% Year-Over-Year-

-Backlog Units up 53% Year-Over-Year-

-Backlog Dollar Value up 50% Year-Over-Year-

-Homebuilding Gross Margin Percentage of 24.6%-

-Diluted Earnings Per Share of $1.00-

INCLINE VILLAGE, Nev., July 22, 2021 / Tri Pointe Homes, Inc. (the “Company”) (NYSE:TPH) today announced results for the second quarter ended June 30, 2021. The Company also announced that its Board of Directors has authorized the repurchase of up to an additional $250 million of common stock under its existing stock repurchase program (“Repurchase Program”) and extended the term of the Repurchase Program through December 31, 2022, increasing the aggregate authorization under the Repurchase Program from $250 million to $500 million.

“Tri Pointe Homes delivered another strong quarter of profitability in the second quarter of 2021, generating fully diluted earnings per share of $1.00, representing a 133% increase as compared to the second quarter of 2020,” said Tri Pointe Homes Chief Executive Officer Doug Bauer. “Our average sales price and homebuilding gross margin percentage came in above the high end of our stated guidance, as our teams did an excellent job executing on our business plan while navigating the supply chain issues that persist in our industry. In addition, we posted company records in a number of key metrics for a second quarter, including home sales revenue, pre-tax profit, and quarter-ending backlog value.”

Mr. Bauer continued, “Order activity during the second quarter was robust as we averaged 4.7 sales per community per month, a 53% improvement over the second quarter of 2020. Demand trends remained elevated in all of our markets and at all of our price points, a sign that buyers remain motivated in a number of demographic segments in conjunction with the ongoing and widespread shortage of available housing supply. Similar to the first quarter, we intentionally constrained our sales releases to implement price increases and manage our backlog, a decision that proved to be a profitable one for our company, as homebuilding gross margin expanded 300 basis points year-over-year to 24.6% for the quarter.”

Mr. Bauer concluded, “With a favorable industry outlook, a sizable backlog and a rapidly improving return profile, Tri Pointe Homes is poised to continue the strong operating momentum into the back half of 2021. Longer term, we believe we have an excellent opportunity to build on our recent success, thanks to the increasing scale we are realizing in many of our markets and the land investments we have made, which will lead to significant community count growth in 2022. Given these positives, we are extremely optimistic about the future of our company.”

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

•Net income was $117.9 million, or $1.00 per diluted share, compared to $56.5 million, or $0.43 per diluted share.

•Home sales revenue of $1.0 billion compared to $766.9 million, an increase of 32%

◦New home deliveries of 1,545 homes compared to 1,229 homes, an increase of 26%

◦Average sales price of homes delivered of $653,000 compared to $624,000, an increase of 5%

•Homebuilding gross margin percentage of 24.6% compared to 21.6%, an increase of 300 basis points

◦Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 27.7%*

•SG&A expense as a percentage of homes sales revenue of 9.6% compared to 10.8%, a decrease of 120 basis points

•Net new home orders of 1,622 compared to 1,332, an increase of 22%

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•Active selling communities averaged 114.5 compared to 144.3, a decrease of 21%

◦Net new home orders per average selling community were 14.2 orders (4.7 monthly) compared to 9.2 orders (3.1 monthly)

◦Cancellation rate of 7% compared to 21%

•Backlog units at quarter end of 3,902 homes compared to 2,558, an increase of 53%

◦Dollar value of backlog at quarter end of $2.5 billion compared to $1.7 billion, an increase of 50%

◦Average sales price of homes in backlog at quarter end of $647,000 compared to $656,000, a decrease of 1%

•Ratios of debt-to-capital and net debt-to-net capital of 37.1% and 25.7%*, respectively, as of June 30, 2021

•Repurchased 3,666,676 shares of common stock at a weighted average price per share of $22.60 for an aggregate dollar amount of $82.9 million in the three months ended June 30, 2021

•Extended maximum amount of revolving credit facility from $600 million to $650 million and extended the maturity date of both the revolving credit facility and term loan facility to June 2026†

•Ended the second quarter of 2021 with total liquidity of $1.2 billion, including cash and cash equivalents of $556.5 million and $593.1 million of availability under the Company’s unsecured revolving credit facility

*	See “Reconciliation of Non-GAAP Financial Measures”
†	The maturity date for $30 million of loans under the Company’s term facility and $45 million of commitments under its revolving facility, respectively, were not extended and remain scheduled to mature on March 29, 2023.

“At Tri Pointe, we understand that the housing market is constantly changing, and that in order to be successful, we must change along with it,” said Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “That is why we invest heavily in market research to keep our new home offerings fresh and maintain our premium lifestyle brand advantage. The same is true with how we leverage technology to improve our processes and reduce costs. Our results in the second quarter of 2021 are a testament to our ability to adapt and change in a market that has become increasingly difficult to navigate as a result of supply chain issues and labor and material shortages. We believe this is a competitive strength for our company, and one that will allow us to be successful as the housing market continues to evolve.”

Outlook

For the third quarter of 2021, the Company anticipates delivering between 1,450 and 1,550 homes at an average sales price between $620,000 and $630,000. The Company expects its homebuilding gross margin percentage will be in the range of 23.5% to 24.5% for the third quarter of 2021 and anticipates its SG&A expense as a percentage of home sales revenue will be in the range of 9.5% to 10.0%. Lastly, the Company expects its effective tax rate for the third quarter of 2021 will be approximately 25.0%.

For the full year, the Company expects to open approximately 70 new communities and end the year with between 120 and 130 active selling communities. In addition, the Company anticipates delivering between 6,000 and 6,300 homes at an average sales price between $625,000 and $635,000. The Company expects homebuilding gross margin percentage to be in the range of 23.5% to 24.5% 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 10.3%. Finally, the Company expects its effective tax rate for the full year to be approximately 25%.

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Stock Repurchase Program

On July 21, 2021, the Company’s Board of Directors approved the repurchase of up to an additional $250 million of Company common stock pursuant to its Repurchase Program and extended the term of the Repurchase Program through December 31, 2022. As of July 21, 2021, the Company had purchased an aggregate of 12,175,129 shares of common stock for approximately $243 million pursuant to the Repurchase Program. Under the Repurchase Program as amended, the Company may repurchase shares of its outstanding common stock with an aggregate value of up to $500 million through December 31, 2022. Purchases of common stock pursuant to the Repurchase Program may be made in open market transactions effected through a broker-dealer at prevailing market prices, in block trades, or by other means in accordance with federal securities laws, including pursuant to any trading plan that may be adopted in accordance with Rule 10b5-1 of the Securities Exchange Act of 1934, as amended. The Company is not obligated under the Repurchase Program to repurchase any specific number or amount of shares of common stock, and it may modify, suspend or discontinue the program at any time. Company management will determine the timing and amount of repurchase in its discretion based on a variety of factors, such as the market price of the Company’s common stock, corporate requirements, general market economic conditions and legal requirements.

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 22, 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 Second Quarter 2021Earnings 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 13721036. 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.

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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; raw material and labor prices and availability; 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

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KEY OPERATIONS AND FINANCIAL DATA

(dollars in thousands)

(unaudited)

	Three Months Ended June 30,											Six Months Ended June 30,
	2021			2020			Change			% Change		2021			2020			Change			% Change
Operating Data:	(unaudited)
Home sales revenue	$	1,009,307		$	766,942		$	242,365		32	%	$	1,725,982		$	1,361,780		$	364,202		27	%
Homebuilding gross margin	$	248,092		$	165,508		$	82,584		50	%	$	419,411		$	287,464		$	131,947		46	%
Homebuilding gross margin %	24.6		%	21.6		%	3.0		%			24.3		%	21.1		%	3.2		%
Adjusted homebuilding gross margin %*	27.7		%	24.6		%	3.1		%			27.3		%	24.1		%	3.2		%
SG&A expense	$	96,752		$	82,748		$	14,004		17	%	$	178,561		$	165,222		$	13,339		8	%
SG&A expense as a % of home sales    revenue	9.6		%	10.8		%	(1.2)		%			10.3		%	12.1		%	(1.8)		%
Net income	$	117,869		$	56,528		$	61,341		109	%	$	188,671		$	88,411		$	100,260		113	%
Adjusted EBITDA*	$	201,986		$	120,771		$	81,215		67	%	$	328,066		$	188,727		$	139,339		74	%
Interest incurred	$	22,558		$	21,828		$	730		3	%	$	43,737		$	42,607		$	1,130		3	%
Interest in cost of home sales	$	30,851		$	21,801		$	9,050		42	%	$	51,529		$	38,623		$	12,906		33	%
Other Data:
Net new home orders	1,622			1,332			290			22	%	3,609			2,993			616			21	%
New homes delivered	1,545			1,229			316			26	%	2,671			2,187			484			22	%
Average sales price of homes delivered	$	653		$	624		$	29		5	%	$	646		$	623		$	23		4	%
Cancellation rate	7		%	21		%	(14)		%			7		%	17		%	(10)		%
Average selling communities	114.5			144.3			(29.8)			(21)	%	113.4			142.4			(29.0)			(20)	%
Selling communities at end of period	109			145			(36)			(25)	%
Backlog (estimated dollar value)	$	2,524,442		$	1,679,068		$	845,374		50	%
Backlog (homes)	3,902			2,558			1,344			53	%
Average sales price in backlog	$	647		$	656		$	(9)		(1)	%
	June 30,			December 31,
	2021			2020			Change			% Change
Balance Sheet Data:	(unaudited)
Cash and cash equivalents	$	556,483		$	621,295		$	(64,812)		(10)	%
Real estate inventories	$	3,085,582		$	2,910,142		$	175,440		6	%
Lots owned or controlled	37,112			35,641			1,471			4	%
Homes under construction (1)	4,336			3,044			1,292			42	%
Homes completed, unsold	19			68			(49)			(72)	%
Debt	$	1,344,574		$	1,343,001		$	1,573		0	%
Stockholders’ equity	$	2,279,290		$	2,232,537		$	46,753		2.1	%
Book capitalization	$	3,623,864		$	3,575,538		$	48,326		1	%
Ratio of debt-to-capital	37.1		%	37.6		%	(0.5)		%
Ratio of net debt-to-net capital*	25.7		%	24.4		%	1.3		%

__________

(1)     Homes under construction included 91 and 86 models at June 30, 2021 and December 31, 2020, 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,
	2021		2020
Assets	(unaudited)
Cash and cash equivalents	$	556,483	$	621,295
Receivables	91,348		63,551
Real estate inventories	3,085,582		2,910,142
Investments in unconsolidated entities	74,051		75,056
Goodwill and other intangible assets, net	156,604		158,529
Deferred tax assets, net	44,388		47,525
Other assets	151,701		145,882
Total assets	$	4,160,157	$	4,021,980
Liabilities
Accounts payable	$	141,143	$	79,690
Accrued expenses and other liabilities	395,138		366,740
Loans payable	258,979		258,979
Senior notes	1,085,595		1,084,022
Total liabilities	1,880,855		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 June 30, 2021 and December 31, 2020, respectively	—		—
Common stock, $0.01 par value, 500,000,000 shares authorized; 115,211,206 and 121,882,778 shares issued and outstanding at June 30, 2021 and December 31, 2020, respectively	1,150		1,219
Additional paid-in capital	203,288		345,137
Retained earnings	2,074,852		1,886,181
Total stockholders’ equity	2,279,290		2,232,537
Noncontrolling interests	12		12
Total equity	2,279,302		2,232,549
Total liabilities and equity	$	4,160,157	$	4,021,980

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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,
	2021		2020		2021		2020
Homebuilding:
Home sales revenue	$	1,009,307	$	766,942	$	1,725,982	$	1,361,780
Land and lot sales revenue	5,416		220		6,939		220
Other operations revenue	660		648		1,323		1,266
Total revenues	1,015,383		767,810		1,734,244		1,363,266
Cost of home sales	761,215		601,434		1,306,571		1,074,316
Cost of land and lot sales	4,874		374		5,027		576
Other operations expense	686		624		1,310		1,248
Sales and marketing	45,489		45,194		85,949		87,831
General and administrative	51,263		37,554		92,612		77,391
Restructuring charges	—		5,549		—		5,549
Homebuilding income from operations	151,856		77,081		242,775		116,355
Equity in loss of unconsolidated entities	(16)		(25)		(29)		(39)
Other income (loss), net	149		(6,328)		257		(5,955)
Homebuilding income before income taxes	151,989		70,728		243,003		110,361
Financial Services:
Revenues	2,681		2,296		4,786		3,890
Expenses	1,485		1,285		2,892		2,364
Equity in income of unconsolidated entities	3,949		2,932		6,640		4,488
Financial services income before income taxes	5,145		3,943		8,534		6,014
Income before income taxes	157,134		74,671		251,537		116,375
Provision for income taxes	(39,265)		(18,143)		(62,866)		(27,964)
Net income	$	117,869	$	56,528	$	188,671	$	88,411
Earnings per share
Basic	$	1.01	$	0.43	$	1.60	$	0.67
Diluted	$	1.00	$	0.43	$	1.59	$	0.67
Weighted average shares outstanding
Basic	116,824,108		130,292,563		118,082,691		132,326,856
Diluted	117,770,084		130,506,567		118,921,340		132,763,775

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MARKET DATA BY REPORTING SEGMENT & STATE

(dollars in thousands)

(unaudited)

	Three Months Ended June 30,						Six Months Ended June 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	223	$	652	165	$	525	383	$	658	305	$	519
California	698	705		490	737		1,155	692		829	747
Nevada	127	589		109	505		201	602		189	515
Washington	69	968		40	916		147	985		92	871
West total	1,117	697		804	671		1,886	698		1,415	675
Colorado	59	568		55	595		99	582		119	580
Texas	233	498		254	477		447	477		463	469
Central total	292	512		309	498		546	496		582	492
Maryland	72	570		75	556		130	559		130	558
North Carolina	21	407		—	—		35	392		—	—
South Carolina	—	—		—	—		4	285		—	—
Virginia	43	725		41	777		70	727		60	791
East total	136	594		116	635		239	579		190	632
Total	1,545	$	653	1,229	$	624	2,671	$	646	2,187	$	623
	Three Months Ended June 30,						Six Months Ended June 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	233	15.2		162	19.0		494	15.1		402	16.9
California	630	39.0		598	54.0		1,320	38.6		1,262	54.9
Nevada	180	11.3		102	16.5		435	11.6		268	15.4
Washington	90	6.2		105	9.5		161	5.6		231	8.3
West total	1,133	71.7		967	99.0		2,410	70.9		2,163	95.5
Colorado	58	5.8		50	3.8		163	5.3		109	4.1
Texas	278	22.0		205	29.7		707	23.0		439	30.1
Central total	336	27.8		255	33.5		870	28.3		548	34.2
Maryland	46	5.7		80	8.5		109	5.8		203	9.1
North Carolina	24	1.8		—	—		66	1.6		—	—
South Carolina	16	2.0		—	—		22	1.5		—	—
Virginia	67	5.5		30	3.3		132	5.3		79	3.6
East total	153	15.0		110	11.8		329	14.2		282	12.7
Total	1,622	114.5		1,332	144.3		3,609	113.4		2,993	142.4

Page 8

MARKET DATA BY REPORTING SEGMENT & STATE, continued

(dollars in thousands)

(unaudited)

	As of June 30, 2021					As of June 30, 2020
	Backlog Units	Backlog Dollar Value		Average Sales Price		Backlog Units	Backlog Dollar Value		Average Sales Price
Arizona	590	$	424,048	$	719	427	$	255,916	$	599
California	1,423	921,602		648		985	689,789		700
Nevada	370	245,895		665		216	134,652		623
Washington	153	165,314		1,080		228	213,093		935
West total	2,536	1,756,859		693		1,856	1,293,450		697
Colorado	190	126,913		668		90	54,170		602
Texas	758	372,381		491		321	146,650		457
Central total	948	499,294		527		411	200,820		489
Maryland	180	107,524		597		190	108,856		573
North Carolina	43	18,509		430		—	—		—
South Carolina	21	7,662		365		—	—		—
Virginia	174	134,594		774		101	75,942		752
East total	418	268,289		642		291	184,798		635
Total	3,902	$	2,524,442	$	647	2,558	$	1,679,068	$	656
	June 30,	December 31,
	2021	2020
Lots Owned or Controlled:
Arizona	3,865	4,128
California	14,749	15,040
Nevada	2,191	2,639
Washington	933	964
West total	21,738	22,771
Colorado	1,506	1,080
Texas	8,900	6,985
Central total	10,406	8,065
Maryland	766	892
North Carolina	3,169	2,808
South Carolina	102	106
Virginia	931	999
East total	4,968	4,805
Total	37,112	35,641
	June 30,	December 31,
	2021	2020
Lots by Ownership Type:
Lots owned	22,706	22,620
Lots controlled (1)	14,406	13,021
Total	37,112	35,641

(1)    As of June 30, 2021 and December 31, 2020, lots controlled included lots that were under land option contracts or purchase contracts. As of June 30, 2021, lots controlled for Central and East include 2,060 lots and 184 lots, respectively, which represent our expected share of lots owned by our unconsolidated land development joint ventures.

Page 9

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 June 30,
	2021			%		2020			%
	(dollars in thousands)
Home sales revenue	$	1,009,307		100.0	%	$	766,942		100.0	%
Cost of home sales	761,215			75.4	%	601,434			78.4	%
Homebuilding gross margin	248,092			24.6	%	165,508			21.6	%
Add:  interest in cost of home sales	30,851			3.1	%	21,801			2.8	%
Add:  impairments and lot option abandonments	232			0.0	%	1,380			0.2	%
Adjusted homebuilding gross margin	$	279,175		27.7	%	$	188,689		24.6	%
Homebuilding gross margin percentage	24.6		%			21.6		%
Adjusted homebuilding gross margin percentage	27.7		%			24.6		%

	Six Months Ended June 30,
	2021			%		2020			%
	(dollars in thousands)
Home sales revenue	$	1,725,982		100.0	%	$	1,361,780		100.0	%
Cost of home sales	1,306,571			75.7	%	1,074,316			78.9	%
Homebuilding gross margin	419,411			24.3	%	287,464			21.1	%
Add:  interest in cost of home sales	51,529			3.0	%	38,623			2.8	%
Add:  impairments and lot option abandonments	445			0.0	%	1,729			0.1	%
Adjusted homebuilding gross margin	$	471,385		27.3	%	$	327,816		24.1	%
Homebuilding gross margin percentage	24.3		%			21.1		%
Adjusted homebuilding gross margin percentage	27.3		%			24.1		%

Page 10

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.

	June 30, 2021			December 31, 2020
Loans payable	$	258,979		$	258,979
Senior notes	1,085,595			1,084,022
Total debt	1,344,574			1,343,001
Stockholders’ equity	2,279,290			2,232,537
Total capital	$	3,623,864		$	3,575,538
Ratio of debt-to-capital(1)	37.1		%	37.6		%
Total debt	$	1,344,574		$	1,343,001
Less: Cash and cash equivalents	(556,483)			(621,295)
Net debt	788,091			721,706
Stockholders’ equity	2,279,290			2,232,537
Net capital	$	3,067,381		$	2,954,243
Ratio of net debt-to-net capital(2)	25.7		%	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.

Page 11

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 June 30,				Six Months Ended June 30,
	2021		2020		2021		2020
	(in thousands)
Net income	$	117,869	$	56,528	$	188,671	$	88,411
Interest expense:
Interest incurred	22,558		21,828		43,737		42,607
Interest capitalized	(22,558)		(21,828)		(43,737)		(42,607)
Amortization of interest in cost of sales	31,124		21,806		51,802		38,628
Provision for income taxes	39,265		18,143		62,866		27,964
Depreciation and amortization	8,990		6,720		16,120		12,176
EBITDA	197,248		103,197		319,459		167,179
Amortization of stock-based compensation	4,506		3,786		8,162		7,411
Impairments and lot option abandonments	232		1,380		445		1,729
Early loan termination costs	—		6,859		—		6,859
Restructuring charges	—		5,549		—		5,549
Adjusted EBITDA	$	201,986	$	120,771	$	328,066	$	188,727

Page 12

XML

Cover Page	Jul. 22, 2021
Cover [Abstract]
Document Type	8-K
Document Period End Date	Jul. 22, 2021
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