TRI Pointe Group (NYSE: TPH) reported Q1 EPS of $0.59, $0.13 better than the analyst estimate of $0.46. Revenue for the quarter came in at $716.7 million versus the consensus estimate of $737.62 million.

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

• Net income was $70.8 million, or $0.59 per diluted share, compared to $31.9 million, or $0.24 per diluted share.
• Home sales revenue of $716.7 million compared to $594.8 million, an increase of 20%
  • New home deliveries of 1,126 homes compared to 958 homes, an increase of 18%
  • Average sales price of homes delivered of $636,000 compared to $621,000, an increase of 2%
• Homebuilding gross margin percentage of 23.9% compared to 20.5%, an increase of 340 basis points
  • Excluding interest and impairments and lot option abandonments, adjusted homebuilding gross margin percentage was 26.8%*
• SG&A expense as a percentage of homes sales revenue of 11.4% compared to 13.9%, a decrease of 250 basis points
• Net new home orders of 1,987 compared to 1,661, an increase of 20%
• Active selling communities averaged 113.3 compared to 140.8, a decrease of 20%
  • Net new home orders per average selling community were 17.5 orders (5.8 monthly) compared to 11.8 orders (3.9 monthly)
  • Cancellation rate of 6% compared to 13%
• Backlog units at quarter end of 3,825 homes compared to 2,455, an increase of 56%
  • Dollar value of backlog at quarter end of $2.5 billion compared to $1.6 billion, an increase of 51%
  • Average sales price of homes in backlog at quarter end of $641,000 compared to $659,000, a decrease of 3%
• Ratios of debt-to-capital and net debt-to-net capital of 37.5% and 25.3%*, respectively, as of March 31, 2021
• Repurchased 3,659,561 shares of common stock at a weighted average price per share of $17.88 for an aggregate dollar amount of $65.4 million in the three months ended March 31, 2021
• Ended the first quarter of 2021 with total liquidity of $1.1 billion, including cash and cash equivalents of $584.7 million and $543.1 million of availability under the Company’s unsecured revolving credit facility

“Tri Pointe Homes delivered record-breaking results in the first quarter of 2021, including the best order performance and home sales gross margin result in our company’s history,” said Tri Pointe Homes Chief Executive Officer Doug Bauer. “Earnings per share for the quarter came in a $0.59 per diluted share, representing a 146% increase over the first quarter of last year. These strong results were driven by a continuation of the favorable housing dynamics we’ve seen for some time, as well as the appeal of our homes across a number of geographies and price points.”

Mr. Bauer continued, “Net new home orders in the quarter increased 20% year-over-year, thanks to a 49% improvement in our absorption pace, as demand for new homes continues to far outstrip supply in most of our markets. We have taken advantage of these strong demand trends with periodic price increases, which is reflected in our home sales gross margin of 23.9% for the quarter. We also realized significant operating leverage in the quarter by keeping overhead costs in check while continuing to grow revenues, culminating in a 250-basis-point year-over-year improvement in our SG&A ratio to 11.4%. These strong operating results helped improve our return on average tangible equity to 15.8% for the trailing twelve month period, while also giving us the confidence to raise our full year outlook for deliveries, average sales price and homebuilding gross margin percentage, while lowering our anticipated SG&A percentage.”

Mr. Bauer concluded, “Our focus continues to be on growing our operations in a profitable manner with an eye towards improving our return on equity. We made great strides on both of these fronts in the first quarter and I believe we remain in great position to make further improvements this year thanks to our sizable backlog, our substantial liquidity position and the strategic initiatives we have implemented. Given the strong fundamental backdrop for our industry and our company’s market positioning, we believe the future is bright for Tri Pointe Homes.”

“The move to one unified brand under the Tri Pointe Homes banner has been a success, with all of our divisions fully embracing the new initiative,” said Tri Pointe Homes President and Chief Operating Officer Tom Mitchell. “We continue to leverage our teams’ local market knowledge and expertise while broadening the awareness of the Tri Pointe Homes brand with our customers and trade partners. We believe this will create a more unified marketing effort across our platform and lead to operational and cost efficiencies for the company over time. The Tri Pointe Homes brand has been synonymous with homebuilding design and innovation and an outstanding customer experience since our inception, and we fully intend that this will be the case in all of our markets going forward.”

Outlook

For the second quarter of 2021, the Company anticipates delivering between 1,500 and 1,600 homes at an average sales price between $630,000 and $640,000. The Company expects its homebuilding gross margin percentage will be in the range of 22.0% to 23.0% for the second quarter of 2021 and anticipates its SG&A expense as a percentage of homes sales revenue will be in the range of 10.0% to 10.5%. Lastly, the Company expects its effective tax rate for the second 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 $620,000 and $630,000. The Company expects homebuilding gross margin percentage to be in the range of 22.0% to 23.0% for the full year and anticipates its SG&A expense as a percentage of homes 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%.

For earnings history and earnings-related data on TRI Pointe Group (TPH) click here.