TPH - Earnings call transcript Q3 2017

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Operator

Greetings and welcome to the TRI Pointe Group Third Quarter 2017 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question-and-answer session will follow the formal presentation. [Operator Instructions] As a reminder, this conference is being recorded. It is now my pleasure to introduce your host Chris Martin, Investor Relations. sir. you, Thank

begin. You may

Chris Martin

results, and Investor call. welcome results Group’s morning available detailing TRI the the deck Presentations tab website to today, the at conference are these Documents Earlier XXXX. financial the quarter earnings a company slide third under company’s Good on of Pointe including Relations released for its www.tripointegroup.com.

are including would course forward-looking operating that statements detailed annual materially filings the certain the not recent update in the the course of of undertakes Before and and call, in report are on discussion forward-looking call. everyone those statements Form historical that uncertainties. the to other cause differ duty statements during of and from company statements remind quarterly factors these facts, XX-Q. call are involve risks The such actual its forward-looking like Form in to that that reports could to XX-K begins, uncertainties are no on this I most important the which A in results SEC, its made company’s made and risks this with made

SEC. most accordance to these the company’s Officer Officer; through measures Doug. over with is call Operating today Additionally, now call. measures I of on to And Pointe be website turn non-GAAP Financial Doug Bauer, Mike the Chief TRI the the with filings that, in comparable the the Grubbs, Executive Tom Hosting company’s the financial President. its Chief Mitchell, company’s and this and will Chief the call will Reconciliations Officer; prepared with GAAP can measures accessed conference discussed non-GAAP financial be in and

Doug Bauer

guidance strong on for I’m of gross the to XXX%. met and price of highlighted that exceeded Thank results deliveries, XX%, growth everyone of disclosed homebuilding growth We earnings to morning of average by per posted margins Group dollar or joining good backlog our announce XX%, again you, another net year-over-year once previously order today’s sales value quarter Chris. new call. us TRI Pointe and pleased in And share growth quarter.

land community net we As XX Ranch Diego closed we in for in Highlands lots a the of selling San our in sale $XX million. Pacific a guided, quarter profit also significant

simply While In our is we improvement land be will reduce to our operations during order top going by sales opportunistic course, general, capitalizing of forward to showed business continue in inventory builders. to our our solid plan bottom the to to homebuilding line. strong and our grow land maximize quarter,

challenges material to experience continue pressures. and to labor cost related We

in predominantly has lottery from evidenced operate XX% most excellent new growth parts the cost constrain constraints us persistent business for up, growth Fortunately, our favorable consistent from with because we – in price product as benefited level, markets, active increase. we been to in enabled for environment. both Southern home rising be orders drivers This sometimes have the or fully supply supply move and partially and order California dynamics and the state market the high by adult market segments. of net Strong continues home in the Northern to job quarter. entry demand our offset California a have

of long state. position our our We land trends well a These lots continue and the outsized in robust in the our XX,XXX see in over to position margins Coast Inland. of demand number along further company communities given

in have quarter. Snohomish for our price Washington counties, we healthy in which the selling benefit state XX% in resulted King and on home average as from focus and operations order growth Our a new XX% the in core to of locations a year-over-year continue market, increase

for markets. new job the performance also grow The of strong growth into southwestern is strength supply encouraged we profit. that our am to fueled Our higher this delivering its market in housing Quadrant constraints brand, by continue I by team to premium the continues and see while future. significant

after Las year-over-year a still As prayers continue per that too are suffer of order from impact Maracay buyer In have in XXX support economy. in significant on damage It an brand key our while been our testament think communities our with geographic the and from is from they helping impact Like that an subsided. making members, Investor people bonded community the and the we other the all early to team the which X.X Texas, being above a XX XXXX. those us the appeal Houston the opportunistic homes a that deliveries to It But committed communities segments impacted we per to ultimate brought pace. live restore Hurricane back initiatives were the Harvey. as business entire improved builder targets XXXX our not Gross thoughts, diversified generate great we this and Arizona, both is we to on order the offerings, active of by quarter, present approximately pushed month. for Vegas is average to points continue and progress event. hurricane devastation together and to for help healthy they XXXX surrounding for most and Houston basis achieving resources storm our during was pace In near-term to recover We team remain number in our people storms to tragically communities shortly builders from work. our of did understand the margins product at Day. open our and the

our Buyer region, the growth expansion. margin the into translated quarter. in sentiment trended which Finally, third in year-over-year in Mid-Atlantic improving order positively in is operations the

trends the we seeing and will are are be product Maryland coming reposition We offerings communities our Virginia by soon. our to encouraged the both about excited are in at market and Northern that

it brands of markets in a to quarter that to produce backlog Pointe Most with history, All a ending bottom confident provide confidence in results on for are XXXX provided will trends of objectives me great future future six company’s great excellent strategic all, delivering We was our that strategy quarter the continue These company. in our coupled TRI improvement our years. in our continue line Group. the biggest our Day. at the we’ve Investor the with give

over like to who to the turn more I’d Now provide will it Mike, detail about numbers.

Mike Grubbs

then Thanks full for Doug. to year metrics morning, on to today’s our like welcome third some I’m remarks XXXX. finish on the highlight outlook also quarter to key quarter expectations everyone my Good and I’d fourth of for with results going an and financial our update the and call.

highlighted XX, includes we’ve provided well as with third our also for as metrics rates our as press detailing strong operating key which brand by results mentioned overall quarter As We’ve quarter earnings metrics ended earnings division Page or slide Chris orders, earlier, various for in on mean, X key posted state slide announcing certain today’s third a and I of charts marked release absorption deliveries call deck homebuilding XXXX. September the the the operating on our website, quarter. by deck.

Our home price quarter sales of the at revenue average was delivered $XXX million $XXX,XXX. an homes on for sales X,XXX

on in work percentage growth November Investor progress meet targeted the ground was million or share. income the discussed at margin $XX.X in was gross per Significant quarter net necessary quarter homebuilding $X.XX XXXX delivery diluted to Day our XXXX. the XX.X% at our and made and Our for also came during XXXX

XX% home net increase on we in a the year-over-year posted in For quarter, selling new average a increase communities a orders on X% basis.

continue to of addition build our we and assets. In development accelerate the out long-term California

new up as these our quarter We quarter the net assets, from from located XX% Western Diego, San from home communities in During were with new to four assets XX% our quarter in Rock last additional the year. opening opening California. of Castle referred orders previously these the the same of community fourth anticipate

communities, Nevada, in three As California, selling during We third count for quarter XX and we ending in of Virginia. selling one in new overall closed two an opened XX one in resulting in in XXX. community three Arizona communities the active communities, Washington,

is end communities Slide selling active by state of at the on quarter X. shown Our the

new we average just I the X% the home quarter, community period. As increase year up prior that an for on count orders from in third reported was XX% net a mentioned

month X.X X.X the community to rate absorption XX% per compared quarter increased period. the overall per year prior in Our to community for homes homes per

backlog homes in see was sales orders and of of September orders with cadence XX% quarter the backlog backlog, $XXX,XXX year-over-year X,XXX culminating which Slide and both ended monthly quarter. to for the of $X.X of increase XX% last historical to increased The being our can compared XX, the same number on terms absorption We the the billion. value year. strongest quarter You in month total with price increased third to in a average the XX%

which homes, During backlog of our year. the increase quarter same quarter was to X% ending X,XXX XX% the compared second last delivering a quarter converted we

delivered last homes Our $XXX,XXX average million, for of last from year resulted the the home sales quarter. was This revenue same from from up in up quarter and $XXX quarter sales of year. XX% last X% up price XX%

midpoint homebuilding Our the guidance margin XX.X% the range. third of quarter our for was gross percentage

gross For margin to deliveries. be percentage the of to expect quarter XX% a of range high we mix fourth due to homebuilding margin California larger our a in XX%

second to in the of quarter. SG&A or basis moment point in I in year-over-year to our period tax This which XX.X%, year percentage expense a XXX as a from of increase take increase from leverage quarter was same For third our quarter the talk the due want as percentage home improvements about was basis our XX% rate. the result largely in improvement was second sales a revenue the sales revenue. XX improvement a SG&A last home point to

the same year increase XXXX. During tax was Congress energy to of the in renewed a lot ago. rate third XX.X% a compared credit not due partly been the by for quarter, deduction was This to our XX.X% has effective that period

third In our negatively stock quarter. addition unexercised tax for the expired options rate impacted

for quarter approximately for XX% tax We year full resulting in approximately expect rate our XX.X% to an the the XXXX. be fourth

located invested The land approximately of deliver land million total strategy needed owned in is deliveries through XXXX. which land owned we XX% $XXX million the we in guidance homes At our currently in During will quarter which all control the third California. for an years delivery communities in controlled our the and Based number development. of acquisition land million lots plan of and target XXXX X.X. or midpoint meet lots are invested in land XX,XXX $XXX beyond is of acquisition and end the quarter to of we approximately development. controlled on or aggregate Year-to-date $XXX have land our land focus of XXXX as to or acquisition we own

of breakdown is and asset markets filed investing our California lots five of in will continue focus in to of quarterly pipeline be long-dated turning later California. on A Our outside shorten land detailed in our Form accelerating to by report our the we faster to XX-Q, these our years approximately duration goal communities owned reflected be on which today.

controlled there of slide addition, the lots Page In summary a in or by XX on state owned deck. is

million for weighted Turning total quarter under to in resulting our $XXX quarter to a average $XXX At of for the during of ended $XXX end We end September At million of our capital the common total weighted at of ended balance repurchases million $XX.XX facility. the a and With net had was and unsecured debt million of total of million X of about with hand million. program, sheet. $XXX $X.X cash price months repurchased aggregate That approximately for of a dollar shares $XX under a real repurchase at the billion revolving remaining liquidity approximately repurchase billion little of dollar aggregate brings amount respect million. authorization. XX%. capital debt we $XX.XX credit under a total our estate quarter, XX.X% of shares $XXX our a million the net our available price had to amount consisting stock on we nine the stock outstanding XXXX of of inventory of $X.X and ratio debt to we a $XX.X XX, average stock to quarter million

XXX summarize at The expects XXXX. communities look full the active our communities and of close selling to like XXXX. want – XX of year fourth quarter out and I’d as I open XX Now outlook in to for December resulting new to XX, company

margin of delivering units its average to I’d price X.X% to to fourth the its sales closing During turn full the be XX.X%. call XX% our XX.X% ratio XX% in gross The XX% anticipates quarter XX% and of expense ratio to to range percentage company X,XXX of some range resulting to expect of the $XXX,XXX. company now $XXX,XXX back a home we at XX%. a to of backlog SG&A then revenue fourth X.X% remarks. in quarter, to full an to in homebuilding finally, between in for quarter year XX% fourth the And be anticipates Doug resulting approximately for like SG&A expense year sales over a

Doug Bauer

Thanks outstanding goals. Mike. us to quarter In enable conclusion meet had exceed an our we or

the in the years that highlighted I execution XXXX. meet that delivering of plan important ended period backlog report visibility this our year last X,XXX in homes am that and on a that for gives XXXX. Because pleased to to note, us confidence the goal. rest It into value we Day’s hosted Investor Additionally, business that of excellent record to track is operational our of land dollar with we two great goal our to we our for and X,XXX position, are

was message focus growth. sales desire homebuilding strategic shift we that Investor last reduce to year’s on land Another Day a at and

had we from on during we will long-term. operations the focus that over will better in returns stream sale land profits quarter result consistent believe a the generating earnings and forward our While going large homebuilding be more

continue team, we are to have the company to our and committed bottom management in a path line. We grow took, to and strides and improvements great a wise year-over-year now as our strategic great made company we investments a drive thanks position to

bright. appropriate you that, this this all any members and And questions. the made journey Because is team part concludes Thank for it company take we Finally, company of big with been to who of and is remarks our a future our today. prepared you. it thank us are the I’ll have incredible of

Operator

Thank you.

question-and-answer now you. We session a Thank conducting be will Instructions] [Operator

Associates. your question. proceed first the & Our of Please question line from Ratner Zelman comes with Alan with

Alan Ratner

right Hey Great November, a at quarter, at last back I first morning. rate guys look little back as your of now years. Day pace sounded that your results. the bit you’re that absorption absorption for question, you’ve and on my look better good then. than congrats the like heavier Analyst strong of expected X.X running couple you kind expressed than or continue to next kind of rate It the Doug,

How price So, is thinking price push of currently. maybe do you dynamic above particular. higher that versus on just to see and level my with are you. running XX% footprint this point Where the maybe thinking volume just about X% question across the affordability points first and you driving in absorptions? and Thank margin absorptions terms your about California at in

Doug Bauer

quarter, strong Alan. It’s Thanks, very been a all a good across segments. demand it’s good There’s homebuilding product market.

very around healthy blessed were or And We last do as the to a we’ll continue month by company two. per And so that a overall as stronger over we’ve indicated it’s quarter. homes market. three a plan per year we and little community

we have as increases that that had the strength in pace the and you’re levers in labor go constantly peoples earlier. with when has or have on to and of closely operate is be as can balancing because pricing – our materials going incomes into very offset tracking Now XXXX to It costs that watch pricing orders, you’re price a of markets just I to factor we continue we and overall infinite notably an power most But noted increase type elasticity. pocketbooks. to

going to So XXXX homes. track X,XXX expect into those to as to we that X,XXX deliver going we’re carefully

Alan Ratner

question follow-on second that And appreciate there. I Great. Doug.

consistent of of in So on orders you you performance I us relative what margins. just you mentioned communities was think is absorptions, of margins last type to a seen high Pardee in if long-dated performance terms gross update which the I’m seen an these kind can we’ve long-dated of the out curious mentioned the with assets years. The performance at California it we��ve couple the Pardee for of assets, quarter. those give of XX% of late, XX% kind of the

Mike Grubbs

Yes, last that’s deliver is some those down XX%. higher margin the Pacific current mean, our of higher fourth delivered Ranch, And Alan like quarter. year-to-date from units the more are from what much Highlands is we why so this lot have remember so margins being I higher of you quarter, communities the in Mike. fourth a assets in but to price, in that hence is the north are year, far margin

as it’s So expected the tracking we XX%. in high

Alan Ratner

it. Got

guys. luck. Okay, lot a great. Thanks Good

Doug Bauer

Alan. Thanks,

Operator

question the Stephen proceed question. next your with comes with East Wells from Our of Please line Fargo.

Paul Przybylski

Paul give be fourth is could if something kind year. that match possible and on next looking This could it if for I growth then Przybylski XXXX the would margin, Yes. for would was of Stephen. wondering, in year’s growth color give on this as into improvement gross you be guidance any year-over-year quarter and you any if reasonable color XXXX community-count to expectations your on

Mike Grubbs

Yes. that to of sooner. numbers we’ve average out growing. in put talked as that to still fourth community-count, mean, reiterating because at what call we But related Paul. we’ve our we’ve there an November We’ll we’re out the our at community-count community-count increased is is because at is This and that about XXXX only it’s of will XXXX. the down in average communities kind Mike. give be closing And to – been Day think XXXX. coming seen exception our I pace update we still of quarter average the quarter last Investor our our the which

Paul Przybylski

Okay.

Doug Bauer

– X,XXX to Paul at you As it look X,XXX. as we’ve in Day, targets the indicated the our Investor plan indicated, this delivery was

still as double So XXXX. we growth we have go into expect digit to

Paul Przybylski

call in was I trends bit on markets Can segments, the that think the little among you and sub of give demand last Cal. there you any northern a color on product California mentioned,

Tom Mitchell

This Tom. Paul. is Yes,

in the that’s to Inland reflected outstanding And quarter continue markets trends end in little California did Empire California. San of a mention our in and demand concern see Last affordability growth. high in all high relative we California well. to think Diego order on the up certainly Northern as up to Northern from We I our

that and closely. strong mentioned, we price But points. all at sign there As balance affordability something price demand and watching right continue to we’re and now, continue is Doug caution we big see to pace no

Paul Przybylski

you. Thank Okay.

Operator

with next Jack Micenko Our question. line Please from question SIG. with comes of the proceed your

Jack Micenko

Good morning. bit. a I little wanted to talk community-count about

a in on I’m community just out the I those Was it or really then to able closed you three think number, to little reconcile of XX. guided average number two get came order yet we’re some communities in it sort opened hadn’t faster. math, numbers. our one to trying to up

Tom Mitchell

quarter. are talking about the for Jack, you

Jack Micenko

Yes.

Tom Mitchell

I Yes. and to quarter. guided during communities closing closed We we’d XX think only XX actually, we the

really impacted what that’s what going to thought open So community new balance. the we opened exactly ending We perspective. from were a

Jack Micenko

it. was And is about of a the state will the first What got a quarter? think move say up to sort Obviously California in of bit there segment. way time product faster. first by in time to Okay, absorb the mix

Doug Bauer

running This running move our level, we’re and XX% is around XX% Jack. Doug, active adult. X% is order entry now lottery Right mix XX% – up,

Jack Micenko

And than ago? was meaningfully that year different say a

Doug Bauer

No. that trending It’s still direction. in

land We continue efforts. our to opportunistic purchasing be in

company under the points along East density of in are as pursuing Texas Coast, whether the areas whether – Texas our and the a or a Trendmaker though more it’s price brand. and brands focusing to with We in tax Coast programs premium higher lower it’s the Coast building

price XX-foot average bring premium the more brand. programs still offer selling pursuing down. We’re But wide our that

Tom Mitchell

of emphasis forward bringing add more we in do we new to the more that, market. thing as have our Jack, product active an go only to adult other I’d

that expansion segment. some see in should we So

Jack Micenko

you. Thank Okay.

Operator

next comes Please Evercore. line the question of with question. Stephen your Kim from Our with proceed

Stephen Kim

great. Okay, guys. Thanks

a You quarter. wanted follow-up couple on had of things. to I just great

was many out this you open we your with sell that I level was quarter thought what carry of higher how fact was question you’d to you absorptions, with number just through. dealing think mostly above thought were growth communities – a that it given think community-count were going because of the answered and I certainly were order I well that didn’t as question quarter. same surprising Jack’s – this a you you Jack’s you able community-count or looking end for. So the about you that It found and massive

thought hear when didn’t that strong order that So implies as as out it you you wasn’t as growth be. sell you might almost your that I thought many as

Tom Mitchell

mean, available it I anything right, very Yes, five Stephen to sale units closing consider for the under sensitive close community. we communities is

of at have So talking about minimum the orders. if quarter end we’re you six at the and mean, – of you’re I the sign

the the going has this it’s to predict it And tag-in actually to the month when the close do forward. at all It to of community. is is. That’s And when very to nothing that so – that’s going out. you’re also one from going difficult at to end with sales next looking

see orders think for I X.X strength by the which something you the spring that selling is quarter, evidenced season. is absorption the typically is of our our fact third the rate in

Stephen Kim

exactly. Yes,

next. I So of wanted kind to there go

something understand were what as saying sell, it just have may didn’t say more units five. four you my to community-count many, let’s had six about you left So you sell or the or

Tom Mitchell

immaterial that an talking about. It’s number we’re

Stephen Kim

doesn’t All I right, got let’s it rate. then so the talk it. matter. Distinction absorption about

growth one in Pointe, the Pointe higher strong Pardee at and TRI observed generally TRI absorptions and your that been pretty of community-count have we’ve So your is Pardee things average. brands has

driving your to your strong stronger company So remaining trend therefore think I wondering Pointe ability absorptions was community-count and you overall what to I and some is that that the into ability expect for you Pardee see continue guess, to – continue. growth TRI what XQ

Tom Mitchell

do that’s as absolutely We evidenced by long-term California assets well. our and

into as California you XXXX. what’s driving move community-count our an We as and into kind those we in in start and our moving XQ, do of So of metrics move forward expand as increase opening well you our communities ability all to margins. see our more average that’s

Stephen Kim

I was out. there. more can if just a absolutely. being active Yes, wondering then specific And give about adult you little mentioned you rolled

be for we talk the those expanding a couple a should might that rates if of out absorption you sense expect Maybe give to normal. maybe about communities think I brands. even higher of than

the little bit rollout numbers. a how it about you Just might talk impact if that could and

Mike Grubbs

Stephen. Sure,

most in also be adult in a be community marketplace Sundance our brand in Pardee to of Pardee will brand. one is our we’ve been just by the And Winchester that We more currently under offering Maracay buyer brand, What that’s focus bringing communities our demographic that have assets and and messaging segment the on a XXXX Empire. active significant that’s going market and Inland really first few segment. to our QX long-dated in of of

So that’s where we some some and growth we think significant see expect absorption do strong there. should we orders numbers in

planned Let’s say, types. four roughly unit XXX with master community product different

significant do So activity to we see expect from that some offering.

Doug Bauer

Stephen add is Doug. would this I

You’re going to start we’re to our community next at on see more of the the Sundance order got growth we in half that second Winchester bring on. at the as we’ve active adult of in communities bringing year

So on it’s XXXX focus buyer of continue XXXX as a going of activity more of we segment. to kind second into that half

Stephen Kim

Excellent.

Thanks much Great guys. very job. Okay.

Doug Bauer

Thank you.

Operator

next with Wedbush. with your comes the proceed of McCanless Please question from line Jay question. Our

Jay McCanless

guys. Hey, morning good Great quarter.

storms, able Houston First or I shift you of any now product are a dirt? the start had and as you result guys land hurdles on and development right guys there. Trendmaker to how question there on Are turning

Doug Bauer

there to out by of weeks Jay, there’s ability Yes, impact it and be into indicated of some developers. I master just year that us affected couple I has as XX deliveries hurdles was ago. with some lot. frankly But the about this that a have the actually self-developing a will plan going to our into community in communities, did continue to one hurricane we that developing not particular in We XXXX. couple were push move the

the – XX to a nine, tell is months too So early little six, be to what going don’t bit impact from it’s we now.

from from be option buyer there’s market, an it’s ongoing plan think discussion. to I XX% were pick there. it’s to the master an a of But our XX% to a lot going revenues come big

need we’ve XXXX plan. to that so And our got far we the lots deliver

Jay McCanless

on in had I of brought you are opportunities ASP there think the entry-level lower in are said you lands question terms of you’re the it or just the in I XXXX, you for said Is it types points. points, more how and taking you homes, side or price seeing I a XXXX you what far down little price focused, believe second going lower for out The entry-level done, along necessarily for bit?

Doug Bauer

that entry is real subcategory, It’s ASP, want say, to just more first really time I’d up down up a price It movement the to fact as and particular. I’ll issues on the move move are looking and but builders you into up along into you level got the of more that some very a XXXX because time and we’re all the get conscious second Coast of conscious go the be you if at more of affordability beyond. forward move –

Tom Mitchell

And Jay. delivery the XX% of answer your we But question range to We bought haven’t what XXXX. for given about is. first north

sure does not are of I’m already for controlled owned it So North XXXX. what you. for of XX% our or lots

Mike Grubbs

Jay locations. diversified of products other at is excellent we and to in a color only different continue that offerings The range I’d add see price all to offer that geographic different points is to our goal to continue

we’re acquisition made happen that far teams and year-to-date. the so efforts with our pretty pleased So they’ve

Jay McCanless

any then apologize And on this, for things I are how trending? commentary Great. October,

Mike Grubbs

XXXX, XXX we’ve so a make didn’t a through had far about so commentary XX week. I net that through on October but sales roughly

Jay McCanless

Great. guys. Thanks

Doug Bauer

Thanks Jay.

Operator

proceed Mike from comes Barclays. with question you’re Please your Dahl of next question. Our line

Mike Dahl

and plan more running one well to back seem Thanks of time. here questions. going strength sticking in understand or guess, but some be and my I of absorption commentary then excess October. that for in absorption just taking the I continuing low terms you that for clearly with in threes Hi. the that to you three

you’ll numbers Or year that of in absorption mix to the full to about. this that communities got at guide of there. for growth say something this in in quarter something is kind to really out fourth – conservatism fair on still point? for the deceleration there you’re would mean the is year X.X it I Is that the at you’ve in get year lead point talking that that else – it to you’re So sharper that’s a full seeing of terms those selling be down out a that more

Doug Bauer

we’re going we’ve XXXX strong year, very is has to run Doug. been as continued be but continue I it as I our this indicated a at X.X. business to to demand indicated strong Mike has mean, very

on sit a a from point, You forward it than delivery a for growth. and continues to kind year good It’s a here and plan. an it’s plan been planned than exactly bit a inflection be a of of it’s environment. But better this forecast it’s it’s compare moving expected But such good it it’s we TRI better – year year-over-year. year. very little also robust very when you with orders can’t and our frankly Yes, Pointe

than of not for So our we’re is going type a the XXXX going are market. a less end to going is or good because of very we’re that than good, and environment on any to the that’s plans planning with in into economy XXXX year me If feel going backlog comfortable otherwise. market continue to there to or better adjust good focus that hiccups we obviously the strong makes the if very

Mike Dahl

okay in jump like comments makes And cushion And then back just that seem you’ll activity. the wanted post little then tell. Right, of XXXX. relative lot this give go the to around sense. to Houston you for could Houston that does But be to guide clear it how just and to too to more a the order storm sense and is progressed patterns understand of have early us a

Doug Bauer

out that Sure. there Like after just yelp the storm. about said, get was just time in I a and I recently to was we

have with which traffic read been I’ve know mean have I some of sales heard but way healthy But don’t don’t I I roads. definitely Our too – there’s it’s Meyer’s our spec team XX% have homes, of the members homes, XXX,XXX early. in issues still insurance. XXX,XXX fighting are

work to have through to going they’re So FEMA.

because are in cautiously expect it’s through our increasing the homebuilders of down into own. actually get we looking more all its to market that in-homes product going of our is that we’re kind does go this making to on market people hold specs drive the drive drove specs lot is we local a the be is people have our of – going still people. sense kind thing are But a now, event take and going so as it’s long down I’m that’s because But about think to and through that. that, margin will environment from definitely that the wonderful we margins But to a saying drove actually new to it’s long we slog at started the specs, that we it’s good optimistic So a we have purchase, years and area. not an XXXX. driving, outside get

So we’ll continue monitor to it.

Mike Grubbs

Mike, just though. that add to

pickup, We for we’re we’re at were the think month of the I we pace at X.XX X.X quarter X.X. have year-to-date our seen and and absorption September

recently absorption rate. So improvement we our did in see more

Mike Dahl

Okay. That’s Thank really helpful. you.

Operator

Nishu question Sood next proceed Our your Instructions] from Deutsche Bank. of the with with line Please question. [Operator comes

Tim Daley

Thanks everyone. is on for Tim This Daley time. the Nishu. Hi, for

margins. So Doug, remark I wanted to the follow-up gross Maracay the on you early on in that about a call made

basis XXX some they So year-over-year, saw Winchester points as expanded improvement well.

provided just I in just XXXX So add us it? Investor I Maracay you take to was range, high gross on be about I the update that Is the and margins. year if XXX since wanted should Day, breakdown given just a on know would to if Investor us kind of on know that’s the Day I it. points how about whether wanted guys could number basis the divisional thinking the that put that

Doug Bauer

correct. That’s

Tim Daley

And I help other with as Quadrant’s out you other right. divisions some like the also Trendmaker could us have wondering know on well. of mention the could you provide and the gross did margins. All color was I – you if But

Mike Grubbs

above about. is I our high in specific XX%. on Yes. that Pardee color is average, XX% those we’re Maracay to is of give divisions. talked on that instance know the the now to Quadrant some mid range assets But and don’t We typically California if margin color the margin just gave long-term going each company right for Doug around

on right has we’re So on maybe now. those on having next that’s not what more know, this we’ve our we’re give rate some everybody color We’ll updated about at of and Day margin at one our the been. Investor I run year typically call. planning

Doug Bauer

you But as that at for earlier, we’re if you I indicated and go XXXX, we back guidance. Day gave look to that the sticking to the Investor guidance

Tim Daley

capital guys for that tracking just All of spend pretty land being that implies big is still QX. about this guide question where in curious case you. on is spend quickly. land for right. And ramp billion million Are a I’m XXXX. Thank then $XXX just second the to the and you Because $X.X deployed.

Tom Mitchell

on that to range probably It’s point Yes. where more mid now sit of the lower range, of today. lower we that here end

let’s $X lot So from and land coming development the a land And majority billion. $XXX it is call California, there. from million to that of here in acquisitions dollars of come

Tim Daley

then just And Okay. following-up. quickly

you of of XXXX. the you’ll a of where land year XXXX, near-term be still supply kind about believe that guys in is mentioned five You kind that

Tom Mitchell

Yes.

where comfortable I think that’s we’re being.

Tim Daley

thank Great you. right. All

Operator

of question. with comes from next FBR. your Rygiel Alex question Please Our with line the proceed

Alex Rygiel

morning, gentlemen. Thank Good you.

Doug Bauer

Hey Alex.

Alex Rygiel

that? getting I just XX% average up a big ASP bit of from existing California the move and price year-over-year. shift backlog selling know, maybe of Could driving XX% suggest comment sort new luxury. in little is be would time mix more there it community detail in up wasn’t seems Is helpful. you on communities. addition, is a just it what’s versus first More versus positive strictly like you’re you it prices units, up

Tom Mitchell

– part XX% quarter price for California. the think delivering of down at I California units the happening ASP that mix was is lower what so more in actually were a in points we’re lot and our is

units are and During the little that’s and the seen you so bill taking longer you’ve backlog significantly. bit a fairly backlog can higher grow imagine longer why our sitting as quarter ASPs priced in there’s to

it year. just So where within delivers primarily all the it’s mix and

Alex Rygiel

inflation a seeing more labor any in cost affected and markets. and you are lastly, issues hurricane availability with broadly specifically And

Doug Bauer

on remodel cash, pressure doing people seeing that that hurricane. kind some and to of people In are the their There of some drywall affected by some labor prices were homes are paying Houston we’re it’s tell. early

take though that Labor and into we it price see don’t. it’s on I big – into our increase again cases as in to expect still up But going we’re cost – but Luckily labor it early, these good need going it’s a labor across go while pressure is generally to XXXX. speaking pressure get we we to that X% to people it demand don’t as that back that these their cost XXXX get X% the continue into strong forward. we’re while And all homes pressure, focus industry. the in ranges move to because get and issue that from price or for offset money for – do markets continue going see we builders. spend company. generally And lighting Overall force is So I see some some we to an too takes aging. a that to to a to to

Alex Rygiel

you Thank much. very

Operator

comes Alex line Center. question. Please Research with your of Barron question from Our next the Housing with proceed

Alex Barron

sub have to seeing Hey, the from or good was community pricing curious different similar? power morning you in and the points. sales pace a job multiple somewhat price experience your terms great about of guys, on highest Empire guys you communities where quarter. some your or like I very they your Are all are Inland of lowest

Tom Mitchell

Hey, Tom, Alex this good is question.

all there price points towards levels. thankful communities we’re it and we active We absorptions higher then lower does slow price there community product absorbing and excellent Banning price still segments. have we at well do have higher we’re Canyon into move in demand down. points, out at the it It as all But primarily pretty our does price multiple and Hills and multiple points. Elsinore in is that Sundance out where our skewed out And range at the

Alex Barron

excellent. And hurricane are then where your or But so point I’m post than another one experience more the been price response so at to in been client seeing far part you lower terms demand post the the of hurricane – move far. the Obviously up builder. higher on can have Okay, Houston. comment curious more other what’s or in price of point kind of city you has you to what another guys

Doug Bauer

we weeks concentration particular area sales. market. say couple see a was pickup a in retail in Houston post producers of points indicated, absorption be are Hurricane And market. And there’s price no ago in two very back did there the one going the well to and as above meeting Mike Well, in with doing I’d honest, I actually $XXX,XXX biggest actually Harvey. in the into the

and ago product in our monitor. We we’ll to offering company do stated wanted So, to a as that to opportunistic year continue more be have so. will continue we a

our years is points. Our ASP you’ll you at average more see business plan the $XXX,XXX you couple as below that next the is been product price come introduce a about $XXX,XXX lower which over can look we and as at see of price

Alex Barron

it. Got

the good Thanks. up well Okay, work. keep

Doug Bauer

Thank you.

Operator

Please with question Ratner proceed your Our is next question question. & Associates. follow-up a Alan from with Zelman

Alan Ratner

to squeezing Hey, guys thanks for me in follow-up.

third-party Or opportunities land in far market time obviously if pretty lots curious there there of the basis share about in out as availability the about is part? long-dated getting as your just you’re lots and developers – to? bit still where seeing But on you option self more I you your if Just XX% the assets look development what acquire supply is talk land low you for just focus could requiring most the is the at of little could wanted at know in online. a still

Doug Bauer

you Maryland, from title the and without it look self markets, at I up an XX develop markets did are generally months chime the to Alan. California, Virginia Tom anywhere in Well, title you when that entitlements. those under six takes we the mean, close will in get Washington don’t Denver, of to in Washington option, speaking state – tied we it

of So that’s kind the marketplace.

sheet state of – Washington avenues and of different those in so pursue no can that the because going we’re And well. those sheet activities forth, potentially inventory our be to going about margin off back we homebuilding you good forward I’ll those operations those you in lot opportunities –a the builders as growth we’ve then earnings and back our and balance – as to have margins. sheet stable increase some only A into more focus in our Now inventory going we are other but add, five as – avenues pattern upside look ROE and to too. feed from off-balance consistent drive put land also look not talked our purchases company looking on pursue we down to continue there’s to we’re our land or more growth at to California to drive that driving at more but stream it think balance I as

Alan Ratner

in Do on guys you next years that of you balance percentage sheet held where a off? have owned going is the over terms versus see target what several

Doug Bauer

no. point, this at Not

Alan Ratner

incentives have Okay. the Do percentage And one year a quarter revenues quick question. this of as just you versus a fact-checking ago?

Doug Bauer

there as our was company not although Year-to-date, in percentage X.X% X.X% has revenue September the sales period. years do. as versus actually have XX.X%. in the Harvey in Houston Also year incentives as but single as it good of Hurricane dropped, pace dropped been as up about our past have note, until are about incentives good it to a versus family the prior We a X.X%

XXXX the reason some that to in Trendmaker improvement hence expect we see see and brand. in is our margin So

Alan Ratner

that. it. for it. Got Appreciate Thanks

Doug Bauer

Yep.

Operator

at back It Mr. appears time. to we this turn floor have closing no I over would the like further questions you for comments. to Bauer now

Doug Bauer

this thank you. look numbers year February. We say. should in this to forward I Well end everybody’s attendances And appreciate year and quarter talking Great. about

Thank you. you after end the So of have a we’ll fourth day to talk great and quarter. the

Operator

teleconference. Ladies and gentlemen today’s conclude this does

lines a disconnect you at time. Thank wonderful participation. may this You your your And have day. for

Tri Pointe Homes (TPH) 25 Oct 172017 Q3 Earnings call transcript