TPH - Earnings call transcript Q3 2020

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Operator

Greetings and welcome to the TRI Pointe Group's Third Quarter 2020 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, David Lee, TRI Pointe General Counsel. ahead. go Please

David Lee

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

future discussion would call, financial that certain including on other detailed this duty these forward-looking which actual in cause and Before forward-looking not the as of involve are everyone statements operating SEC statements the statements risks to results update A and company's remind law, risks concerning no Except call filings. performance uncertainties factors are and like that undertakes the to materially statements. required begins, facts, and are to I differ historical by that made uncertainties. could company

on Executive Operating GAAP Chief Officer; TRI to that, and call reconciliations and measures call filings. turn Hosting company's Doug the of today through and accessed this be the call are the Glenn comparable Mamet, discussed Officer; Officer. Linda Bauer, most Officer Pointe's its Marketing company's over the Chief President; Doug. I the company's will Chief Tom With can Financial SEC the Mitchell, financial Keeler, non-GAAP in Additionally, now to website measures Chief the company's

Doug Bauer

results over company's initiatives, Thanks the joining and David, go our color today quarter our some on outlook. for and of thank for discuss provide you third to XXXX, strategic us

as and don't of admiration for. are we as and workers it lot we and front that, have results, staying I'd the hope last a families like you Before has long be us pandemic express who well. clock, we ongoing around to line to third-quarter the will this any thankful I discuss appreciation and our despite thought think for your are working our

grow. new desire homes continues is thriving for the as industry Our to

the a the a for to implementing to improvement month. effectiveness a community earlier on inflation of of implemented sales representing representing product Group share execution results revenues XXX These broad-based as driven our Pointe a third XX.X%, of demonstrate and expansion of the we've order desirable highly quarter in basis the number Net X.X gross quarter SG&A of we X.X%. of delivered basis buyers strong Well, percent improvement margin. results across fundamentals, per success price home the orders had at initiatives TRI team of generated for The increase year-over-year the XX% Home a our a cost-cutting an points end our over to cohort. $X.XX XX% per geographies and range. improved XXXX, great combination increased per year. increases of the profile, earnings segments revenue in a a housing by last quarter, XX% As result, margin homebuilding came year. We for and members. by guidance pace our to high demographic and millennial XXX point in order eclipsing this Thanks pre-tax our improvement XX% XX% was stated sales the in excellent cost with offset

the are country changes that low-interest-rate a that lifestyle occurring of and clearly are environment portion the believe home due notion this we historically while the our is the will to all While there shifts on a have increasingly impact industry. a greater Americans fueling emphasis pandemic. are demand on have we placed Millennials demographic of the are long-term seeing, of current in embracing ages positive home-ownership

our company operations are of a occurring This in our we're the laser-focused area fronts. our is emphasis advantage industry, one thanks ways on our of should we take five returns. of progress and As number the have an that making to for we continue continue on to that's to scaled improve, we to growth improve as

we opportunity returns several long-term of better area first our see assets. comes projects for The California from associated of with our

we assets the Inland due Investor the would located earnings Day, the During emphasized Clarita near depressed our our bring and Santa our of to potential to them in also that investment upfront be in highlighted Empire XXXX the to returns term but market. needed

and average years to necessary the putting into and maximize several generating communities next their in communities to the realizing Over appeal. returns these profits. with forward several on positive healthy sales and above these the we today amenities company about we infrastructure are Fast investments set paces

we the the Austin, avenue our early-stage see Sacramento. through divisions The returns for maturation Carolinas and Dallas, of is better second like

any established scale have with a as is level basis. case operations to in takes profitability it on consistent new is the but time foothold achieved a We in the which to venture, more markets a these

to in necessary years. move for markets expect contributions the We start-up investments these to over these our to improve return have in next we profitability made the profile their past divisions and few the phase

Our option last XX% controlled effort now the third of stands ago. as the third of few lever end turns. quarter We XX% to two years via over the lots increase and compared made years to conscious number at of increase XXXX a of inventory number the to that

our XX% Xx way program. improve fourth inventory can annually get repurchase Based count more to deals by capital-efficient can as XXXX. lots by continuing our and lot sellers control turns land share percentage a our through appropriately we up projections, specifically financing A well structuring transactions utilizing improve to with are on our grow we return on our which believe to we is manner. to in in current We as lot option our option equity

to the year our XXX forward, to annual from in homebuilding sacrificing the The organization. cash operations. XXX current process be authorization. on a this across to continue intend we we a we we initiative continue in on authorization programmatic improvements program. better returns repurchased We utilize generation Based stock stock million final portion amount we drive ongoing commitment our to strong can and have to of fourth far are our going repurchase of and without to remaining our million operational So quarter committed believe repurchase capital to our utilize and our low growth focusing is our in debt stock levels,

As increase we trends in evolved homebuyer into efficiencies anticipate and we company-wide a behavior, seek to company. have technology-driven

has the in functions construction ability Over streamlined CRM implemented has our and to us we made to field new savings. our lead past platform XX us centralize operations. G&A have accounting certain upgraded a that the improve that system, months, solutions more and will efficiencies This back-office given our management

of technological improved a initiatives, simplification to our known to enhancements our that which on in these for reduce sales start for. national more multiple and and overall Having the one we transformative we cycle merger the create also us change functional unified We strategic the company home. WRECO times made around with the Along desire performance our has will six we company drive excited concentrate consumers' made value. approach for for product awareness have in content implemented customer by operational to brand, going also and to brand nationally program over goal experience new financial selection from results stronger option we and well efficiency was will efforts to focus virtual six. served personalization will that stay as software while with the efficiencies, company our with shop announce TRI that all an of years. and with XXXX instead is we generate have Homes. the operating one allowing brand cost Pointe us further forward the efficiencies improving driving The same past This inherited completed shareholder will I'm providing It as decision the stride

and is across land the define pillar broaden while established fostering teams over platforms the years our TRI Pointe will time look and overarching longstanding an to and our sellers and best, forged we partners. with During the relationships and of brands financial Group future our resources trade culture are the as geographic powerful and own have backed with local vision continue we the that operating successfully trusted That leadership to small who to technology continue relationships by footprint. local expertise big six we

ways make the central to small, trends, differentiate our the company the efficient big been us. that to continue a strategies in the Along with ahead and operational that we have us of more pillars customer-driven will will consumer evolving success in and best, ourselves key in are consider life-changing While being and business.

perform price highest permanents love all a high lifestyle and motivates what possible them aspects we place people craftsmanship design the All on our they empowers As all points. of across is this because innovative to levels. the our passion that brand, business, to and culture at a of and do priority premium

we and of will Homes early Pointe and operate Through We forward to of continue will the to are next end TRI the the across XXXX. TRI brand we transitioning year, the in the new level. move our under first as country excited existing our Pointe brands Homes take to company quarter to begin this

of of for to I TRI team quarter. have grown details company I a the a many turn to over the more put proud for to success in am I Finally, Pointe years the initiatives these for very all will how With we say to position undertaking Glenn wanted and as provide for strategic come. that, to call

Glenn Keeler

will slide some certain highlights information then key provides posted going of our for to Thanks financial third website. quarter. and and I of third the times, on XXXX. morning our is with that full-year X the and for I'm be financial everyone. to finish referring deck and call my Doug, quarter fourth At remarks and and Slide our operational earnings the good highlight expectations deck our outlook the some quarter from metrics of from results our

community pace robust homes highest per was Demand XXXs resulting X.X of sales orders nine strong by reported the product community markets, community XX% an X.X with quarterly As the especially Doug with per strong by year-over-year, absorption the in broad-based mentioned, prices of ever our new third over month was home month. with month. Empire increasing homes led driven per California's of the high which homes per entry-level our demand offerings the our mid to per but from sales rate California per Inland quarter XXXs. from performance absorption was in net rate

the fortunate supply long We suitable Empire. for Inland in are have entry-level a to product land

homes XXX in year-over-year. the average challenges so buyer as potential mindful such we San margins selling are supply basis result, divisions new are price. point price seen over existing have affordability those With both is aggressively, demand Diego of and of our for of price assets, for and pace and at we pushing been some strong, gross over more in both entry-level the focusing Seattle we have is Conversely, and as also improvement low on divisions where a these higher

October, on recorded sales based in are we in have past construction new the experienced sync. have far XXX months, we strong So over to be managing phase orders, releases several and demand we the closely to allow

We due are costs. sure pricing appropriately monitoring costs, new lumber largely to to increased we to also are input offset input those homes make

see this we have we expected. the markets, factors due of housing year year our to into of we slowing normal have strong pace I just of closed sales see to end While our fundamentals strong discussed. the continue in experienced, previously as Due and the sales all to than head we some communities of more the we out to expect seasonality

XX closed XXX active of opened XX, we quarter, communities. the quarter ending with communities and selling the out For new

the and a timing distributed which communities active and XX, new rest closeout, our the over quarter increase equally XXXX of with to active an first For Depending quarter, new we communities, are XXXX XXX. of of the will XXX out on projected close count expect XXXX, planning throughout would fourth we seven community count figure. the result represent In the ending which communities, of selling we XX open year-end open XX estimate in community community would which be ending to XX% year. in

XX planned we For openings. community XXXX, new currently have

year-over-year on increase a Turning price revenue home to This resulted deliveries for XX% XX% sales an million, homes in an which was $XXX average was which of selling delivered year-over-year. $XXX,XXX. increase of the XXXX quarter, we

anticipate average California our to full-year be in in as few which especially As come over selling $XXX,XXX entry-level in our next of We and price on the $XXX,XXX more outside to divisions, and we first our years. down price focus segments, company approximately and the move-up we a selling XXXX. average XXXX expecting communities grow our early-stage are

revenue We percentage more mix profitability lower year-over-year. margin long-term to Doug for or result forward. XX.X%, we home from of of income a from margins the the mix by a and per of lead SG&A as were a encouraged gross The a an the decrease quarter. California was XX basis of due will to despite XXX and the Our long-term going sales XX% $X.XX was million efficiency progress consistent our for diluted revenue assets savings in that of in homebuilding strength some the have percentage point $XX decrease was margin gross assets as California the mentioned was believe the in quarter, the feel we Net increasing quarter earlier. increase prior share, year-over-year, compared quarterly to point gained was outside of leverage expense the X.X%, initiatives of our basis year. results quarter in increase the we of lower made which the which improvement California a in demonstrates the

early filed quarter's At later the under that diluted for the week. of was or which owned we detailed option. this Form per quarter-end, extinguishment debt lots, reflected our A share be were earnings XX,XXX in of which lots to related on charges owned call, XX-Q, be of were will quarter. breakdown approximately controlled will last XX% highlighted $X.XX Excluding our

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

we Looking at at had $X the inventory. quarter-end, balance of billion real estate sheet, approximately

was Our to a to the billion, million quarter net cash ratio liquidity, billion of credit $XXX of the in capital million net over revolving debt company on availability Year-to-date, and of of generated XX.X%. debt under from operations and $X.X of $X of XX.X% outstanding ratio capital total in $XXX a of debt hand positive cash facility. of million flow consisting our unsecured resulting $XXX ended and with

outlook the our and Now, I'd full summarize year. quarter to for fourth like

to percentage to SG&A fourth expense sales range $XXX,XXX homes quarter XX.X% of expected XXX XXX at the in X.X% quarter. price For revenue is XX.X% anticipates an to gross the the of Homebuilding XXXX, expected as home the to the between $XXX,XXX. margin average a of and for range be sales and in company fourth to delivering be is XX.X% of of

the Lastly, XX.X%. fourth XX% range be the expects the for quarter XXXX effective its tax of to in company to of rate

is XXXX in full for to gross year, we and at As average Homebuilding $XXX,XXX a $XXX,XXX. the delivering sales an anticipate as home full XX.X% of of our range of SG&A in XX% year, expected the margins result, between to the of be XXXX price be to XX.X% the to XX.X%. range to while homes percentage for expected expense a is sales revenue

to forecasting XX% is year tax the in effective company turn of to the some its I Finally, rate over closing for call for back XX.X%. Doug range full now remarks. the to the be will

Doug Bauer

business come beginnings Pointe looking the rapidly of way geographic depths I'm Thanks, Over the grown We've very in I'm start housing have our phase ago. and made quarter up our with Homes our manner evolution. we and a diversified forward time, we pleased this standpoint. a operations, to over and from homebuilding just a the progress Glenn. product in of both TRI this a next XX humble long that recession years from as profitable

from over should This a operating size great at to witnessing for We believe competitors rational, nature growth in of is continue environment disciplined our leverage discipline to departure mindset are grow our now of from time. approach strategies and a the are produce a and to industry prudent more consistent better and scale is our cycles costs, a result a our shareholders, returns we as operating previous well. all in We the position while operations to is this in manner. cyclical a our

were future Homes. Given are experiencing as strong excited implemented we dynamic, our am changes in Pointe and for that I TRI demand trends ever as with of company, the the along this

work Together, and Finally, hard your getting contributions something concludes I would your we and be due going large ethic. us we'll tireless men happy today a my and dedication on now in your setting path working in entrepreneurial are the your is like in and to where prepared we That your where the express questions. part organization. remarks you. women to us are appreciate I to Thank our gratitude this special. to future. building spirit, of to take It we are to

Operator

Ivy Please [Operator Zelman from with comes Instructions] ahead. first Associates. Our Zelman question go

Ivy Zelman

family cycles, a seen so big starts to not getting that why X And we've back Doug, but get not investors, through and prior recently things like you X.X picture a financial not too I and think think views? as basis million grown starts just and at X.X housing of industry conservative or single been and you have answer on more a [technical question to I us I've love had the in land from XXXX if if Well I'd forecast as clearly hear told regular for I'd the it been my we've is since million answer to I've maybe development the you fast to your maybe respond. great how can. help let can’t chain million in can why difficulty] your and hear or that nature certainly supply crisis

Doug Bauer

was back I what was broken would I up think It’s your - why get around I question that right. Ivy. little to industry Hi, refer the levels up, XXXX to I but can't back a think is

Ivy Zelman

peak about XXXX. the Yes

Doug Bauer

when you potentially regulatory the as the of to ourselves supply the environment be And you when environment, natural with think the true in forward the before land grow to Yes into like right go get regulatory mean well the to advantage are future. probably phrase homes larger housing of labor, and and trades depending have, key buffer look permits to sub of environment. is market you I are is take position of because about But labor the before land, chain the pandemic inhibitors that the a down have a the on capitalized supply but and is a XXXX. use in I able even more the which to kind aggressive of all the get their regulatory we get been the going it I you channel complete And so to on views starts pandemic. housing impediments builders all and to environment political the for tough now pandemic in market that's kind think nationally those after. supply chain those that

- growth - are saw those inhibitors we the primary are those primary that's XXXX. the So in to that that

Ivy Zelman

recognizing for recognizing that growing supply are are municipalities your lots doing do you’re you And me my - growth some to could correct our of that's real impediments really trading What development if the but impediments just and get advantage listening of to why constitute development small that you their faster - guys it while of big of soft curtail are soft just the local just you are predominantly where and to the an any even are? it's Is the publisher in XX% guys many to the gives and the land. constituents increase there that market as challenged currently the I'm no with and really backyard. saying than wrong, organization

Doug Bauer

we can. for as through is would time been biggest California, probably having business environment that challenge. here the create we continues the transactions the manage But challenge which doing and value cannot we've listen actually me over assets. a self-develop that's regulatory going the it in a environment. Well, I that just one is be best to tough, anyone look we of get like actually the we that down environment for the right bigger the and builders trades it I challenge has do think across and to we're environment to to can to well anecdotally and and been the XX business create regulatory been the years. team why long our land years for California and said called have because navigate come shrink business. builders environment really probably some regulatory to XX look a more I've as or come work do to The comes land We our in smaller a I’ve has We business always the company this us that at

So or builders I market XX the a several for to increase think years. the XX see you share got next to top

Operator

Jay go from Wedbush. comes Please question with ahead. Next McCanless

Jay McCanless

more had able And thanks QX? you you're apologies to power or Hi, I could the your on raise pricing talk percentage question. elaborate my release for during missed but you if taking today of about price about this, I what communities talk and in the guess comments

Doug Bauer

of Jay. of decrease combination were Yes, or which in XX% is and a increase We and over able price communities. price, to incentives both our

Jay McCanless

And those XXXX, to the have up talking fruition. I assets runway and then the when just about mean, second the you those was of one highlighted is what finally longer you are ways the to the all now guess wanted I five running were right those had, and in you discussed for returns seeing improve there question highlighted first I Doug than assets XXXX in way the you we're now? all a or assets you come

Doug Bauer

because path for is Santa would as of price have. have as that play. into lots out our and touch We the in California we those we Well, blessing in far we actually out that there Inland set Clarita, example, runway thousands is a there and is there. assets a nobody so can XXXX we own and us put thousands Empire, that's base of longer lots that control points

the continue profits there call. what is we'll for other cash and outlined implement and strategies for that us to healthy flow we So homes out that very to all generate years, in the does build

Jay McCanless

one. what authorization quick was me of end the more you remaining Glenn, XQ? could the one at tell then And

Glenn Keeler

million I about and million it. $XX if remember $XX it's Yes, between million. $XX It's

Operator

Truman Please ahead. from Wells Fargo. Patterson with comes question Next go

Truman Patterson

question. and result my taking thanks for Nice

two can't growth and having getting difficulty have having ground and labor are get the your finding you those actually cycle people product you're are Is seeing I'm labor one you to complete closings then convert on and it issues really starts also and know, lot outright extending from product the any You think the homes actually side, ability in and constructed. of questions thinking categories the is bigger one where construction the to of about order no your different just XX% the that know areas, a shortages there get one homes? that you I

Doug Bauer

both our of instances Truman, Doug. on There which you our suppliers cycle zero cities the probably COVID-related - have those to up drifted that labor have none problem due factors trades primarily is right is this times we is to the are X% pandemic have on the and No accounts. to or impacts XX%, absolutely getting now. where I tell pandemic. and had will

that's the chain it's to supply X% been but elongation, been So XX%.

Truman Patterson

Okay.

the issues very think great, labor no encouraging. side That's but I Okay. is on

Doug Bauer

No, all. not at

Truman Patterson

Is very encouraging.

Doug Bauer

going so U.S., a about labor the at age talked in as about, you average the is in on is Is electrician, labor that because the Are or we there. out the have Because industry share they’re are where limiting XX the the chain that factor. the think I XX construction situation of I Ivy top of those beginning, factor inhibitors our increase supply When I to the at market top chain. it a talking pandemic? and were in disruptions that's and Yes. look labor are to palmer and there and the builders? when aging Yes. the we the But forth, field macro-limiting picture and mid-XXs, labor, or despite have macro the XX, XX so access to access top No. supply the for the XX the

Truman Patterson

Okay. Thanks for that.

ahead. Go Sorry.

Tom Mitchell

Tom. is This

want there clarification there don't we you challenges the are out in supply chain. not Just as thinking a because

Truman Patterson

Yes.

Tom Mitchell

challenges we have availability. solutions but with those creative successful challenges dealing we're week relative to other every like with Every up product to builder, been coming in just overcome

causing happening heard as that is not deliveries it about the are experienced all continually that any closing opportunities you've year. and this But we've for any well. delays or ones certainly missed our So

Truman Patterson

fairly you fourth lot, that to of cost ahead margin a pricing up quarter and you on input should following enough it these Also other sequentially XXXX windows, we're through How stay et currently some on lumbers of the moving allowing parts offset comment about forward costs are costs? think in at really you doors, think pricing these could happening If hearing the is market the we the gross in just or us the just to up flooring, the significant decline? look cetera. and you what walk inflation, then interior roofing, you moving inflation either it's seeing

Glenn Keeler

long California it's in Truman, decrease deliveries slight just for in is fourth is in slightly guide is the The Glenn. there less that. fourth which us, mix quarter gross margin really for the the impacting term assets the quarter,

little impact QX but will lumber more QX, I think QX that bit the know, next of versus of felt in Tom, I a year want don't more. be and if you to elaborate on

Tom Mitchell

costs, and begin are fully, that is that of will deliveries we've our in for supply, that as lumber, will QX to be off additional big to a felt lumber those highs. able spike QX, generate but lumber had fundamentally, mills expectation all-time move its Yes, the

very So demand power. us strong we a which gives pricing see come profile, expect price to that down still and we

continue on So to increases consumer. able to pass the we to expect to be cost those

Operator

from comes RBC Dahl question Next ahead. go Mike Markets. with Capital Please

Mike Dahl

it's you're closer pace, probably I large sustainable mix to so the the Doug, historically, I But higher, you two, pace, think - would mix can has community-by-community. out in push like current year. environment is mean, of ask three pace some all to answer certain monthly in at geographies your seems changed there's your be full it just month communities your I you've your a of potentially the know look about this of you? be And next view been thinking almost on going absorption a and to for part, to to call, and variation least every Empire, four peak tracking what and to at you kind and when I standpoint, for year, close from Inland has push where you areas go continue you've continue like but highlighted, this a

Glenn Keeler

We we down. Yes, our up XXXX XXXX going going our see basis. a is company a think on positive. pace and average I company going ASP see view our absorption Therefore very into macro as a as

had our the rate I we're you for slightly company other absorption great hit our demand us more about of early and season sale sale as bullish should that communities really season know average very ground. summer really because the hit be the many situation or it's yes in housing on level the in late this our So new summer mix going us all product higher companies previous business entry is to years. look the It's And spring company very next fall. really We've overall premium. about really the into getting in couple is a XXXX than years and XXXX tremendous

up view of the next housing businesses move the and First for to lining years. couple be to the is silver going we economy the

which to we So as outlined multiplier It's of ever. to and community we the comes lot a I'm the really opening we've excited next communities just economy effect more is down years two be through over that the hopefully tremendous can got going growth suffering.

Mike Dahl

of if think largely relatedly sense. mix. It I then highlighted you makes margin Good a to on side hear. the XQ function is And

the about at gross as that inflation. stage these cost the the in to strength regionally look with we that think your assets long-term at long-term and order revenues this pieces lumber consistent margin I contribute yes sales - the if setting it XXXX. on there's XXXX? on and that suggest than but for an would upward we XXXX other trajectory then and too fair would think so side seemingly look asset Is more margin we But strategy moving should certainly that in is as

Glenn Keeler

I of like fully margin specific I next is in assets think of percentage But ability price California again mix just be coming year, will from less our these yet mentioned, about higher of a to of labor higher pricing kind I we next ranch haven't have one we going power some the to think higher end think because the XXXX the less because is for but be long-term that thing term down do have long we increases open. assets think the to But deliveries ASP there's communities we because think seen. of given guidance year Tom offset specifically. we've so

portion as other and we're think turning opening we're communities a about good year margins about we to over our The of mentioned is so thing communities. next for XX

on does that impact margin some just based so And as well on have pure…

Tom Mitchell

And I we putting the strategy would motion all and have. strategy which add XXXX a as Mike we our mean laid in in I assets - long-term we out

Mitchell the outside there monitor that the generator of be and XX, line. from we XX path operating are that a as really very in all can XXXX we the we the But to over have mean divisions we all we divisions And at XX will both California. a be revenues manner is So consistent very now summarizes point consistent that a here. next will what and XX happening It's all by line, a are and of consistently you're have we outline - strategic months. seeing I profits

Operator

go Next question ahead. Kim comes Evercore. from Please Stephen with

Stephen Kim

do majority your much? talked pricing and of The first question throughout was about was those evenly XX% quarter and price you how in or relatedly that prices the increased of I sort the community this later are spread actions quarter - over option upgraded spend action price, in seeing was your of you raising of curious feel taken customers was as in somewhat and to the relates like general you from

Tom Mitchell

the would XX% and we’re a range percentage in from quarter to basis over up to for And say overall really then Stephen, a fairly and ticked slightly that it's quarter. the options as year options consistent in the our year our of XX% take Tom. pricing throughout revenue. began early consistently running we're And increases I hold the

Stephen Kim

the move when you move? that you it the about as other then and Can And the term similarly could point. for see might that think we of this result revenue. if Pointe that there any quantify are about us TRI a then to anticipated then talk that costs the savings as for quantify sense what And could at makes talk one similarly longer term you I us bring result brand you that will of longer savings other which a

Glenn Keeler

Good Stephen question. it's Glenn.

QX this that contemplated be reduction going majority of supporting was since in $XX will in versus only or the quarter. savings the enforce in that Some we one that that of of was majority year. a took forward. marketing we'll actually brand six annual the discussed took be savings contemplated incremental that of place that But There last of some million we

Stephen Kim

think of very talk you But that are to know company for first lastly this your we guys that about bit to that would demand. little predict figure you production theoretical deliveries your tax be always a annualized for I I I then about difficult place look would imagine trying And capacity orders to to if the would an capacity I quarter. wanted a you that took

cycle your You that didn't really times extend. mentioned

not national the having issues the as competitors that of of are as some experiencing. some your much maybe other labor You're some of of

everything X you taken be it could on took of you orders you maybe this maybe an you that's think But you're a by think kind that number leave you a also number probably like to would or orders So on capacity didn't table booked theoretical wouldn't token the annualized quarter what any reasonable you the times that for them because either didn't that's right in in could. pride that something now reasonable you same have time. deliver the orders if like

about So is that capacity a right of fair production your way max now. thinking

Doug Bauer

the us builders chain. couple labor a including the all in all, supply in battling of that first at ways always look are Well

really guess providing you’ve the have and as that business and of to housing deal going with any what then a doesn't down that up just said unique the I stand if for deal Number them about it or and we're labor you communities talked comes I backdrop place supply get the a don't new selling. two excellent in market and to know lot chain an So and the really in and I kind the put ability theoretical issues that market company is corrected. providing, is I I'll

parts in pattern our we a of lot and the on so Inland early growth divisions see tremendous And forth. existing so whether so our have Empire but in of our it's divisions growth stage a only of Arizona Colorado whether it's existing also several platform not

business we our share market how how really the become can marketplaces. at XX of we is a in look one that's top in So each

Operator

Please question from go Next FIG. Micenko ahead. with comes Jack

Jack Micenko

I temporary wanted bit. we to conversion hopefully Obviously a little a it backlog a this have talk issue the let's pandemic call and year.

some some safe inventory. rebound you or to mentioned. perhaps the turn in assume for this mixing slowdown spec are the more into lower price point type conversion may little and know XXXX Is arguably You spec-ish backlog of it in that reasons faster a and year beyond

Glenn Keeler

lot number our end that the a there's just XXX. think the Jack I because the that get sold takes versus don't it’s being had through just we Glenn selling time mainly XXX in is completed growth a the going historical the I conversion. some to think you're of season really way back it to quarter. is some spec XXX of going of those year we've only see rebound. that the such strong low, unstarted Usually sales and it's to normal to levels some homes back have and of spring the at work all And between specs count half

that conversion. backlog and the you're seeing So obviously quarter that same those your close not within sale benefits

normal. we take versus to this improve what time of year been XQ year get a but bit has back to it'll obviously, think it'll little next compare So when you it historically XQ for

Jack Micenko

pricing long the assets so then And footage then got underlying and last the California you've versus increase assets, over on you've mix increase of cost price labor your us term share I of cost land sort with stick. guess got year? brick can square and footage you the square the dynamic, in

Glenn Keeler

Jack. of front we don't have that you We’ll number to get it right us in

on from hip, back just get you we'll So instead shooting to it. of the

Operator

with Next BTIG. from Reichardt question ahead. Please go Carl comes

Carl Reichardt

my Steve have got Kim one. question, I just so branding

So Doug you about… talked

Doug Bauer

minute booby you won the prize. Carl, a Wait

Glenn Keeler

Didn't you brand mention last call. one

Carl Reichardt

got where there you're Yes to to just moving I options. time of because greater you on here. kind land inventory isn't to [Raco] about I get of to look talked wanted if it to moving a or to the time how whatever over mix now option for this got one-time homes? efficient did. XXXX options build to you're XXXX. your my think by lot between beginning for ask being from he markets But your the if bridge question to it of is improve lower a off, you've moving more that get it's function there's that I drivers Doug burn But more that or it turns could options, about drivers and are that feasible by to one. easier And that you've held long end get a at inventory a you of beyond moving that a me turns mix? just one - is to X.X And than by leverage I pull Can you it's goal

Glenn Keeler

bit take it time, because a California I of hit still all asset there's of but No, pipeline. lots think lot the long-term levers, that you a does in on little

said, of and you efficient Texas the we capital continue some like efficient and markets so communities And Carolinas our more like to new and as markets. move through those add and

one but to get - reasonable that I a goal, still that's timeline. I will think that's We think

Doug Bauer

for mean and outlined cash those we for when is backdrop Carl, up really all a to in profits that we those play street. in XXXX the us I setting flow able we to strategic assets talked would I back that add. significant perfect have it about for be put implement objectives generating

really out - but flow great those So as cash still out assets and it's are Glenn profit. still there generate pointed

our simplified. our execution. those going out use So pointed we'll we of assets we're We're also simplification But achieve still lot that to a those personalization in offer approach. returning and high plan reinvest to to looking produce in it get more turns more your plans know you and you as think we better can times execution as Those as get well. your technology in still even and we - today with simplified cycle

great But achieve going there's land a is type factors we on the look a to of us going as there. myriad backdrop So for forward those of returns. long

Carl Reichardt

And Doug focus acquisitions impact thinking all? the on at your on turns/returns -

Doug Bauer

Acquisitions of land or companies? acquisitions of

Carl Reichardt

right? Builders

Doug Bauer

M&A - continue be the oh we'll okay. front. builders opportunistic Oh on to Yes,

segments actually The the mention it demographic noted and capital It's in is net of the millennial the script. available, interesting clarification for into outlined XX%, talked one orders we significant see gives have industry doesn't this couple the amount fact script our preview it the demand and thinking our in broad-based way I our the a cohort. of I years. little earning our XX% and buyers sneak geographies. change primary are next and we I but what increasing by about we the you So in that XX% about focus that Carl should earnings

Operator

Housing Our Please with next ahead. question Center. comes go Research from Alex Barron

Alex Barron

and Yes, on quarter. guys thanks great the job

Doug Bauer

Thanks Alex.

Alex Barron

Does do we quarter. the you that orders next going first region this and are on first Can saw going guys the you and that communities that when quarter can that the how where the we closings. guess expect delivered over and next you going many expand be not Carolinas I or till see year? have XXXX to

Doug Bauer

tremendous Shell year this a Great putting of Carolina. question has excited together closings really our I'm a get on first will Alex organic in we It's the board Gray a thanks. start-up. Yes, closings model there. job done very team

control. over of well Carolinas X,XXX And XX that communities opening in well over X,XXX we X and to lots year. upwards have next the actually we actually new have We more own

be operating we're the will at they and excited. level. So Charlotte end is on a pattern. strong Raleigh a significant very XXXX, growth And very by of

So great and for thanks up. that setting question

Alex Barron

expand if buyer like more built-to-order what's operating more there? some is base you can just, And it you entry more more spec us basis move Are up? can level, you there, give a sense target the on or

Doug Bauer

both been there XX that's time the in move Charlotte Charlotte - in both for premium first what up. And the - we're Raleigh. Raleigh. in core I stay strategy submarkets the to first focus and would call our core is the and Yes, and focused entire But top

in more will more production environment, you’ll reflect So where a have ground. specs that on oriented

on. townhome product really bringing attractive that some we're You'll see

both lot but you'll built, a be on production level. So of to going on have - a spec yes, also there on a

Alex Barron

Okay. could I And more one if the…? on ask

Doug Bauer

Yes.

Alex Barron

How is guess next Doesn't investing - capacity see the you do stock the credit finish giving price land you to you're you stock at market's the seem coming. do you said going point? balance this quarter, how that's enough that the I purchase the versus see given balance at? for up into but Very your where growth the

Doug Bauer

I portion in $XX authorization. utilize Glenn earnings remaining I our of the million. mentioned call, as current to going look million, about to the it's think Well, $XX we're

Glenn Keeler

yes. million $XX

Doug Bauer

a levers going one a or then will a think that And combination We the outlined we stock five as yield to to we're four of those forward, of much next stronger returns team. the very that's forward where to of shareholder proud I'm value We we couple committed in path all programmatic repurchase And shareholders. levers returns program the our XXXX increase years going weak. be said sure. for in flat laid of to would out a

program, and to flow repurchase company So more one and programmatic only we benefits put also a in stock those early environment throughout divisions able the be our but stage the to assets be all the in efficient under oriented of going reap in expand about play to brand. return we're profits our cash now and not

Operator

from ahead. comes question go Alex Rygiel FBR. with Riley Next B. Please

Alex Rygiel

at you all? the margins changed sales can your structure Quick about question, talk cost process how and or gross virtual that's

Linda Mamet

the are can converting we in home online Obviously investment bigger efficient process contact process sales sale. to of and sales an of virtual much terms that came The to shopping are quarter. process, is contributing a that. be in every with more there's of costs there a are but number In Linda. of online virtual finding XX% those once certainly more - is sales we and in shoppers this factors Alex, for going our more our program online sales QX, through we our assets a in

Doug Bauer

And be of the that time we over model then merchandising ultimately and going add think process. models we're just in Alex our decrease spend because to I'd able to virtual

will there think be we ultimately So there. savings

Alex Rygiel

cancellation Excellent in lastly and was what the quarter? the then rate

Glenn Keeler

It was X%?

Linda Mamet

X.X%.

Glenn Keeler

Yes.

Operator

I comments. Doug would turn questions. over Bauer to There further the floor are closing for like to no

Doug Bauer

a of and forward to next thank look today. quarter. healthy you you safe Well, very wish we season. families your much and and - Thank for all we us holiday you And joining you talking to

Operator

today's This concludes you. Thank conference.

and you thank may disconnect at lines this participation. You your time your for

Tri Pointe Homes (TPH) 22 Oct 202020 Q3 Earnings call transcript