Press Release: Tri Pointe Homes, Inc. Reports 2026 Second Quarter Results

Dow Jones08-14

INCLINE VILLAGE, Nev., Aug. 13, 2026 (GLOBE NEWSWIRE) -- Tri Pointe Homes, Inc. (the "Company") today announced results for the second quarter ended June 30, 2026.

Results and Operational Data for Second Quarter 2026 and Comparisons to Second Quarter 2025

   -- Home sales revenue of $685.1 million compared to $879.8 million 
 
          -- New home deliveries of 1,013 homes compared to 1,326 homes 
 
          -- Average sales price of homes delivered of $676,000 compared to 
             $664,000 
 
   -- Homebuilding gross margin percentage of 18.0% compared to 20.8%. 
      Excluding inventory-related charges of $19.7 million, our homebuilding 
      gross margin percentage was 20.8%*. 
 
          -- Excluding interest and impairments and lot option abandonments, 
             adjusted homebuilding gross margin percentage was 24.0%* 
 
   -- SG&A expense as a percentage of home sales revenue of 32.5% compared to 
      12.6%. Excluding $122.1 million of compensation-related charges 
      associated with the Sumitomo Forestry transaction, SG&A expense as a 
      percentage of home sales revenue was 14.7%*. 
 
   -- Loss before income taxes was $165.3 million compared to income before 
      income taxes of $84.4 million. Results included $196.8 million of charges 
      associated with the Sumitomo Forestry transaction and $19.7 million of 
      inventory-related impairment charges. Excluding these items, adjusted 
      income before income taxes was $51.2 million* compared to $84.4 million. 
 
   -- Net new home orders of 1,147 compared to 1,131 
 
   -- Active selling communities averaged 164.3 compared to 149.8 
 
          -- Net new home orders per average selling community were 7.0 orders 
             (2.3 monthly) compared to 7.6 orders (2.5 monthly) 
 
          -- Cancellation rate of 11% compared to 13% 
 
   -- Backlog units at quarter end of 1,494 homes compared to 1,520 
 
          -- Dollar value of backlog at quarter end of $1.1 billion compared to 
             $1.2 billion 
 
          -- Average sales price of homes in backlog at quarter end of $713,000 
             compared to $776,000 
 
   -- Ratios of homebuilding debt-to-capital and net homebuilding debt-to-net 
      capital of 25.9% and 16.9%*, respectively, as of June 30, 2026 
 
   -- Ended the second quarter of 2026 with total liquidity of $1.3 billion, 
      including cash and cash equivalents of $462.1 million and $821.0 million 
      of availability under our revolving credit facility 

* See "Reconciliation of Non-GAAP Financial Measures"

About Tri Pointe Homes, Inc.

One of the largest homebuilders in the U.S., Tri Pointe Homes, Inc. has a presence in 13 states and the District of Columbia, and is a recognized leader in customer experience, innovative design, and environmentally responsible business practices. The company builds premium homes and communities with deep ties to the communities it serves--some for as long as a century. Tri Pointe Homes combines the financial resources, technology platforms and proven leadership of a national organization with the regional insights, longstanding community connections and agility of empowered local teams. The company is one of the 2026 Fortune World's Most Admired Companies, 2026 Fortune 100 Best Companies to Work For$(R)$, and recognized as a PEOPLE Companies That Care(R) (2023--2026) organization. The company was also named as a Great Place To Work-Certified$(TM)$ company for five years in a row and named on several Great Place To Work(R) Best Workplaces lists. Tri Pointe has also won multiple Builder of the Year and Developer of the Year awards. For more information, please visit TriPointeHomes.com.

Forward-Looking Statements

Various statements contained in this press release, including those that express a belief, expectation or intention, as well as those that are not statements of historical fact, are forward-looking statements. These forward-looking statements may include, but are not limited to, statements regarding our strategy, projections and estimates concerning the timing and success of specific projects and our future production, land and lot sales, operational and financial results, including our estimates for growth, financial condition, sales prices, prospects, and capital spending. Forward-looking statements that are included in this press release are generally accompanied by words such as "anticipate," "assuming," "believe," "contemplate," "could," "estimate," "expect," "forecast," "future," "goal," "guidance," "intend," "likely," "may," "might," "outlook," "plan," "potential," "predict," "project," "projection," "should," "strategy," "target," "will," "would," or other words that convey future events or outcomes. The forward-looking statements in this press release speak only as of the date of this press release, and we disclaim any obligation to update these statements unless required by law, and we caution you not to rely on them unduly. These forward-looking statements are inherently subject to significant business, economic, competitive, regulatory and other risks, contingencies and uncertainties, most of which are difficult to predict and many of which are beyond our control. The following factors, among others, may cause our actual results, performance or achievements to differ materially from any future results, performance or achievements expressed or implied by these forward-looking statements: the effects of general economic conditions, including employment rates, housing starts, interest rate levels, home affordability, inflation, consumer sentiment, availability of financing for home mortgages and strength of the U.S. dollar; market demand for our products, which is related to the strength of the various U.S. business segments and U.S. and international economic conditions; the availability of desirable and reasonably priced land and our ability to control, purchase, hold and develop such parcels; access to adequate capital on acceptable terms; geographic concentration of our operations; levels of competition; the successful execution of our internal performance plans, including restructuring and cost reduction initiatives; the prices and availability of supply chain inputs, including raw materials, labor and home components; oil and other energy prices; the effects of U.S. trade policies, including the imposition of tariffs and duties on homebuilding products and retaliatory measures taken by other countries; the effects of weather, including the occurrence of drought conditions in parts of the western United States; the risk of loss from earthquakes, volcanoes, fires, floods, droughts, windstorms, hurricanes, pest infestations and other natural disasters, and the risk of delays, reduced consumer demand, and shortages and price increases in labor or materials associated with such natural disasters; the risk of loss from acts of war, terrorism, civil unrest or public health emergencies, including outbreaks of contagious diseases, such as COVID-19; transportation costs; federal and state tax policies; the effects of land use, environment and other governmental laws and regulations; legal proceedings or disputes and the adequacy of reserves; risks relating to any unforeseen changes to or effects on liabilities, future capital expenditures, revenues, expenses, earnings, synergies, indebtedness, financial condition, losses and future prospects; changes in accounting principles; risks related to unauthorized access to our computer systems, theft of our homebuyers' confidential information or other forms of cyber-attack; risks associated with the Company's integration into the Sumitomo Forestry Group, including purchase accounting, financing, systems, controls, reporting processes, and the realization of anticipated benefits from the Merger; and additional factors discussed under the sections captioned "Risk Factors" included in our annual and quarterly reports filed with the Securities and Exchange Commission. The foregoing list is not exhaustive. New risk factors may emerge from time to time and it is not possible for management to predict all such risk factors or to assess the impact of such risk factors on our business.

Investor Relations Contact:

InvestorRelations@TriPointeHomes.com, 949-478-8696

 
 
                                                    KEY OPERATIONS AND FINANCIAL DATA 
                                                          (dollars in thousands) 
                                                                (unaudited) 
 
                                     Three Months Ended June 30,                                 Six Months Ended June 30, 
                      ---------------------------------------------------------  --------------------------------------------------------- 
                           2026            2025          Change       % Change        2026            2025          Change       % Change 
                      --------------  --------------  -------------  ----------  --------------  --------------  -------------  ---------- 
Operating Data:                                                           (unaudited) 
  Home sales revenue  $  685,118      $  879,832      $(194,714)      (22.1)%    $1,191,614      $1,600,618      $(409,004)      (25.6)% 
  Homebuilding gross 
   margin             $  123,096      $  183,202      $ (60,106)      (32.8)%    $  218,526      $  355,715      $(137,189)      (38.6)% 
  Homebuilding gross 
   margin %                 18.0%           20.8%          (2.8)%                      18.3%           22.2%          (3.9)% 
  Adjusted 
   homebuilding 
   gross margin %*          24.0%           25.2%          (1.2)%                      23.3%           26.1%          (2.8)% 
  SG&A expense        $  222,538      $  110,974      $ 111,564       100.5%     $  313,384      $  211,591      $ 101,793        48.1% 
  SG&A expense as a 
   % of home sales 
   revenue                  32.5%           12.6%          19.9%                       26.3%           13.2%          13.1% 
  (Loss) income 
   before income 
   taxes              $ (165,332)     $   84,350      $(249,682)     (296.0)%    $ (158,441)     $  170,860      $(329,301)     (192.7)% 
  Adjusted EBITDA*    $   83,068      $  139,322      $ (56,254)      (40.4)%    $  122,925      $  265,020      $(142,095)      (53.6)% 
  Interest incurred   $   18,326      $   20,374      $  (2,048)      (10.1)%    $   36,911      $   41,693      $  (4,782)      (11.5)% 
  Interest in cost 
   of home sales      $   21,263      $   25,578      $  (4,315)      (16.9)%    $   37,733      $   48,613      $ (10,880)      (22.4)% 
 
Other Data: 
  Net new home 
   orders                  1,147           1,131             16         1.4%          2,381           2,369             12         0.5% 
  New homes 
   delivered               1,013           1,326           (313)      (23.6)%         1,749           2,366           (617)      (26.1)% 
  Cancellation rate           11%             13%            (2)%                        10%             12%            (2)% 
  Average selling 
   price of homes 
   delivered          $      676      $      664      $      12         1.8%     $      681      $      677      $       4         0.6% 
  Average selling 
   communities             164.3           149.8           14.5         9.7%          161.1           147.7           13.4         9.1% 
  Selling 
   communities at 
   end of period             169             151             18        11.9% 
  Backlog (estimated 
   dollar value)      $1,064,633      $1,179,715      $(115,082)       (9.8)% 
  Backlog (homes)          1,494           1,520            (26)       (1.7)% 
  Average selling 
   price in backlog   $      713      $      776      $     (63)       (8.1)% 
 
                         June 30,      December 31, 
                           2026            2025          Change       % Change 
                      --------------  --------------  -------------  ---------- 
Balance Sheet Data:    (unaudited) 
  Cash and cash 
   equivalents        $  462,085      $  982,814      $(520,729)      (53.0)% 
  Real estate 
   inventories        $3,436,045      $3,178,248      $ 257,797         8.1% 
  Lots owned or 
   controlled             33,271          32,219          1,052         3.3% 
  Homes under 
   construction(1)         2,514           1,392          1,122        80.6% 
  Homes completed, 
   unsold                    343             681           (338)      (49.6)% 
  Total homebuilding 
   debt               $1,098,735      $1,104,054      $  (5,319)       (0.5)% 
  Stockholders' 
   equity             $3,140,839      $3,315,834      $(174,995)       (5.3)% 
  Book 
   capitalization     $4,239,574      $4,419,888      $(180,314)       (4.1)% 
  Ratio of 
   homebuilding 
   debt-to-capital          25.9%           25.0%           0.9% 
  Ratio of net 
   homebuilding 
   debt-to-net 
   capital*                 16.9%            3.5%          13.4% 
 

__________

(1) Homes under construction included 39 and 48 models as of June 30, 2026 and December 31, 2025, respectively.

* See "Reconciliation of Non-GAAP Financial Measures"

 
 
                       CONSOLIDATED BALANCE SHEETS 
                          (dollars in thousands) 
 
                                             June 30,       December 31, 
                                               2026             2025 
                                           -------------  ---------------- 
Assets                                      (unaudited) 
  Cash and cash equivalents                 $    462,085   $     982,814 
  Receivables                                    175,514         147,250 
  Real estate inventories                      3,436,045       3,178,248 
  Investments in unconsolidated entities         245,695         183,075 
  Mortgage loans held for sale                    86,881          98,514 
  Goodwill and other intangible assets, 
   net                                           156,603         156,603 
  Deferred tax assets, net                        43,132          43,132 
  Other assets                                   211,811         187,899 
                                               ---------      ---------- 
      Total assets                          $  4,817,766   $   4,977,535 
                                               =========      ========== 
 
Liabilities 
  Accounts payable                          $     79,848   $      41,693 
  Accrued expenses and other liabilities         420,675         425,289 
  Loans payable                                  450,600         456,468 
  Senior notes                                   648,135         647,586 
  Mortgage repurchase facilities                  77,459          90,570 
                                               ---------      ---------- 
      Total liabilities                        1,676,717       1,661,606 
                                               ---------      ---------- 
 
  Commitments and contingencies 
 
Equity 
  Stockholders' equity: 
    Common stock, $0.01 par value, 100 
     and 500,000,000 shares authorized 
     and 100 and 84,478,836 shares issued 
     and outstanding at June 30, 2026 and 
     December 31, 2025, respectively                  --             844 
    Additional paid-in capital                        --              -- 
    Retained earnings                          3,140,839       3,314,990 
                                               ---------      ---------- 
    Total stockholders' equity                 3,140,839       3,315,834 
    Noncontrolling interests                         210              95 
                                               ---------      ---------- 
      Total equity                             3,141,049       3,315,929 
                                               ---------      ---------- 
    Total liabilities and equity            $  4,817,766   $   4,977,535 
                                               =========      ========== 
 
 
 
 
                  CONSOLIDATED STATEMENT OF OPERATIONS 
                          (dollars in thousands) 
                               (unaudited) 
 
                     Three Months Ended June 
                               30,             Six Months Ended June 30, 
                     ------------------------  -------------------------- 
                         2026         2025        2026          2025 
                     -------------  ---------  -----------  ------------- 
Homebuilding: 
  Home sales 
   revenue           $ 685,118      $879,832   $1,191,614   $1,600,618 
  Land and lot 
   sales revenue            23         3,364          598        5,185 
  Other operations 
   revenue                 825           814        1,650        1,634 
                      --------       -------    ---------    --------- 
      Total 
       revenues        685,966       884,010    1,193,862    1,607,437 
  Cost of home 
   sales               562,022       696,630      973,088    1,244,903 
  Cost of land and 
   lot sales               205         3,253        1,184        4,994 
  Other operations 
   expense                 812           793        1,625        1,587 
  Sales and 
   marketing            45,333        50,171       83,220       93,113 
  General and 
   administrative      177,205        60,803      230,164      118,478 
                      --------       -------    ---------    --------- 
    Homebuilding 
     (loss) income 
     from 
     operations        (99,611)       72,360      (95,419)     144,362 
    Equity in 
     (loss) income 
     of 
     unconsolidated 
     entities              (24)          471         (112)         966 
    Transaction 
     expense           (73,779)           --      (79,656)          -- 
    Other income, 
     net                 5,652         7,174       12,888       16,303 
                      --------       -------    ---------    --------- 
      Homebuilding 
       (loss) 
       income 
       before 
       income 
       taxes          (167,762)       80,005     (162,299)     161,631 
                      --------       -------    ---------    --------- 
Financial Services: 
  Revenues              16,106        18,403       29,599       35,904 
  Expenses              13,676        14,058       25,741       26,675 
                      --------       -------    ---------    --------- 
      Financial 
       services 
       income 
       before 
       income 
       taxes             2,430         4,345        3,858        9,229 
                      --------       -------    ---------    --------- 
(Loss) income 
 before income 
 taxes                (165,332)       84,350     (158,441)     170,860 
Benefit (provision) 
 for income taxes        7,646       (23,640)       7,565      (46,133) 
                      --------       -------    ---------    --------- 
Net (loss) income     (157,686)       60,710     (150,876)     124,727 
Net (income) loss 
 attributable to 
 noncontrolling 
 interests                 (12)           38          (36)          57 
                      --------       -------    ---------    --------- 
Net (loss) income 
 available to 
 common 
 stockholders        $(157,698)     $ 60,748   $ (150,912)  $  124,784 
                      ========       =======    =========    ========= 
 
 
 
 
                                  MARKET DATA BY REPORTING SEGMENT & GEOGRAPHY 
                                             (dollars in thousands) 
                                                   (unaudited) 
 
                     Three Months Ended June 30,                          Six Months Ended June 30, 
          --------------------------------------------------  -------------------------------------------------- 
                    2026                      2025                      2026                      2025 
          ------------------------  ------------------------  ------------------------  ------------------------ 
                        Average                   Average                   Average                   Average 
          New Homes      Sales      New Homes      Sales      New Homes      Sales      New Homes      Sales 
          Delivered      Price      Delivered      Price      Delivered      Price      Delivered      Price 
          ---------  -------------  ---------  -------------  ---------  -------------  ---------  ------------- 
West            458    $       795        640    $       735        800    $       788      1,161    $       750 
Central         376            550        481            546        650            556        858            551 
East            179            637        205            717        299            670        347            740 
          ---------  ---  --------  ---------  ---  --------  ---------  ---  --------  ---------  ---  -------- 
  Total       1,013    $       676      1,326    $       664      1,749    $       681      2,366    $       677 
          =========  ===  ========  =========  ===  ========  =========  ===  ========  =========  ===  ======== 
 
                     Three Months Ended June 30,                          Six Months Ended June 30, 
          --------------------------------------------------  -------------------------------------------------- 
                    2026                      2025                      2026                      2025 
          ------------------------  ------------------------  ------------------------  ------------------------ 
            Net New     Average       Net New     Average       Net New     Average       Net New     Average 
               Home     Selling          Home     Selling          Home     Selling          Home     Selling 
             Orders   Communities      Orders   Communities      Orders   Communities      Orders   Communities 
          ---------  -------------  ---------  -------------  ---------  -------------  ---------  ------------- 
West            556           74.8        523           68.8      1,161           73.3      1,167           67.8 
Central         426           65.0        423           61.0        862           63.5        836           60.6 
East            165           24.5        185           20.0        358           24.3        366           19.3 
          ---------  ---  --------  ---------  ---  --------  ---------  ---  --------  ---------  ---  -------- 
  Total       1,147          164.3      1,131          149.8      2,381          161.1      2,369          147.7 
          =========  ===  ========  =========  ===  ========  =========  ===  ========  =========  ===  ======== 
 
 
                 As of June 30, 2026                As of June 30, 2025 
                    Backlog                            Backlog 
          Backlog    Dollar      Average     Backlog    Dollar      Average 
           Units     Value     Sales Price    Units     Value     Sales Price 
          -------  ----------  ------------  -------  ----------  ------------ 
West          785  $  629,058   $       801      813  $  682,250   $       839 
Central       472     282,083           598      450     271,975           604 
East          237     153,492           648      257     225,490           877 
          -------   ---------      --------  -------   ---------      -------- 
  Total     1,494  $1,064,633   $       713    1,520  $1,179,715   $       776 
          =======   =========      ========  =======   =========      ======== 
 
                 As of June 30, 2026              As of December 31, 2025 
          ---------------------------------  --------------------------------- 
                      Lots      Lots Owned               Lots      Lots Owned 
             Lots  Controlled       or          Lots  Controlled       or 
            Owned     (1)       Controlled     Owned     (1)       Controlled 
          -------  ----------  ------------  -------  ----------  ------------ 
West        9,086       3,498        12,584    8,629       3,864        12,493 
Central     5,203       8,397        13,600    5,188       8,017        13,205 
East        1,992       5,095         7,087    2,137       4,384         6,521 
          -------   ---------      --------  -------   ---------      -------- 
  Total    16,281      16,990        33,271   15,954      16,265        32,219 
          =======   =========      ========  =======   =========      ======== 
 

(1) As of June 30, 2026 and December 31, 2025, lots controlled included lots that were under land option contracts or purchase contracts. As of June 30, 2026 and December 31, 2025, lots controlled for West include 275 and zero, respectively, and for Central include 5,607 and 5,356, respectively, which represent our expected share of lots owned by our investments in unconsolidated land development joint ventures.

 
 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES 
 (unaudited) 
 
 

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

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

 
 
                              Three Months Ended June 30, 
                    ------------------------------------------------ 
                        2026          %          2025          % 
                    ------------  ---------  ------------  --------- 
                                 (dollars in thousands) 
Home sales revenue  $685,118      100.0%     $879,832      100.0% 
Cost of home sales   562,022       82.0%      696,630       79.2% 
                     -------      -----       -------      ----- 
Homebuilding gross 
 margin              123,096       18.0%      183,202       20.8% 
  Add: interest in 
   cost of home 
   sales              21,263        3.1%       25,578        2.9% 
  Add: impairments 
   and lot option 
   abandonments       19,734        2.9%       13,096        1.5% 
                     -------      -----       -------      ----- 
Adjusted 
 homebuilding 
 gross margin       $164,093       24.0%     $221,876       25.2% 
                     =======      =====       =======      ===== 
Homebuilding gross 
 margin 
 percentage             18.0%                    20.8% 
                     =======                  ======= 
Adjusted 
 homebuilding 
 gross margin 
 percentage             24.0%                    25.2% 
                     =======                  ======= 
 
 
                              Six Months Ended June 30, 
                 ---------------------------------------------------- 
                      2026           %           2025           % 
                 --------------  ---------  --------------  --------- 
                                (dollars in thousands) 
Home sales 
 revenue         $1,191,614      100.0%     $1,600,618      100.0% 
Cost of home 
 sales              973,088       81.7%      1,244,903       77.8% 
                  ---------      -----       ---------      ----- 
Homebuilding 
 gross margin       218,526       18.3%        355,715       22.2% 
  Add: interest 
   in cost of 
   home sales        37,733        3.2%         48,613        3.0% 
  Add: 
   impairments 
   and lot 
   option 
   abandonments      20,802        1.7%         14,169        0.9% 
                  ---------      -----       ---------      ----- 
Adjusted 
 homebuilding 
 gross margin    $  277,061       23.3%     $  418,497       26.1% 
                  =========      =====       =========      ===== 
Homebuilding 
 gross margin 
 percentage            18.3%                      22.2% 
                  =========                  ========= 
Adjusted 
 homebuilding 
 gross margin 
 percentage            23.3%                      26.1% 
                  =========                  ========= 
 
 
 
 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) 
 (dollars in thousands) 
 (unaudited) 
 
 

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

 
 
                                      June 30, 2026      December 31, 2025 
                                    -----------------  --------------------- 
Loans payable                        $    450,600       $        456,468 
Senior notes                              648,135                647,586 
Mortgage repurchase facilities             77,459                 90,570 
                                        ---------          ------------- 
  Total debt                            1,176,194              1,194,624 
Less: mortgage repurchase 
 facilities                               (77,459)               (90,570) 
                                        ---------          ------------- 
  Total homebuilding debt               1,098,735              1,104,054 
Stockholders' equity                    3,140,839              3,315,834 
                                        ---------          ------------- 
  Total capital                      $  4,239,574       $      4,419,888 
                                        =========          ============= 
Ratio of homebuilding 
 debt-to-capital(1)                          25.9%                  25.0% 
                                        =========          ============= 
 
Total homebuilding debt              $  1,098,735       $      1,104,054 
Less: Cash and cash equivalents          (462,085)              (982,814) 
                                        ---------          ------------- 
  Net homebuilding debt                   636,650                121,240 
Stockholders' equity                    3,140,839              3,315,834 
                                        ---------          ------------- 
  Net capital                        $  3,777,489       $      3,437,074 
                                        =========          ============= 
Ratio of net homebuilding 
 debt-to-net capital(2)                      16.9%                   3.5% 
                                        =========          ============= 
 

__________

(1) The ratio of homebuilding debt-to-capital is computed as the quotient obtained by dividing total homebuilding debt by the sum of total homebuilding debt plus stockholders' equity.

(2) The ratio of net homebuilding debt-to-net capital is computed as the quotient obtained by dividing net homebuilding debt (which is total homebuilding debt less cash and cash equivalents) by the sum of net homebuilding debt plus stockholders' equity.

 
 
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES (continued) 
 (dollars in thousands) 
 (unaudited) 
 
 

The following tables present certain non-GAAP financial measures reflecting adjustments for inventory-related impairment charges and costs associated with the Sumitomo Forestry transaction, including transaction-related compensation costs and professional fees. We believe reflecting these adjustments is useful to investors in understanding our recurring operations by eliminating the effects of certain non-routine events, and may be helpful in comparing the Company to other homebuilders to the extent they provide similar information.

 
 
                        Three Months Ended June 30, 2026                   Six Months Ended June 30, 2026 
Gross Margin 
Reconciliation   As Reported    Adjustments          Adjusted     As Reported     Adjustments           Adjusted 
                 ------------  -------------  ---  ------------  --------------  -------------  ---  -------------- 
Home sales 
 revenue         $685,118       $        --        $685,118      $1,191,614       $        --        $1,191,614 
Cost of home 
 sales            562,022           (19,734)        542,288         973,088           (20,802)          952,286 
                  -------          --------   ---   -------       ---------          --------   ---   --------- 
Homebuilding 
 gross margin    $123,096       $    19,734        $142,830      $  218,526       $    20,802        $  239,328 
Homebuilding 
 gross margin 
 percentage          18.0%                             20.8%           18.3%                               20.1% 
 
                        Three Months Ended June 30, 2026                   Six Months Ended June 30, 2026 
SG&A 
Reconciliation   As Reported    Adjustments          Adjusted     As Reported     Adjustments           Adjusted 
                 ------------  -------------  ---  ------------  --------------  -------------  ---  -------------- 
Sales and 
 marketing       $ 45,333       $        --        $ 45,333      $   83,220       $        --        $   83,220 
General and 
 administrative 
 (G&A)            177,205          (122,112)  (1)    55,093         230,164          (122,112)  (1)     108,052 
Total sales and 
 marketing and 
 G&A             $222,538       $  (122,112)       $100,426      $  313,384       $  (122,112)       $  191,272 
As a percentage 
 of home sales 
 revenue             32.5%                             14.7%           26.3%                               16.1% 
 
 
(Loss) Income Before 
Income Taxes           Three Months Ended         Six Months Ended June 
Reconciliation            June 30, 2026                 30, 2026 
                      ---------------------       --------------------- 
(Loss) income before 
 income taxes (as 
 reported)               $    (165,332)             $     (158,441) 
                      ----  ----------            ---  ----------- 
Add: inventory 
 impairment charges 
 and land and lot 
 option abandonments 
 and pre-acquisition 
 charges included in 
 cost of home sales             19,734                      20,802 
Add: 
 transaction-related 
 expenses included 
 in G&A                        122,112       (1)           122,112       (1) 
Add: 
 transaction-related 
 expenses included 
 in financial 
 services                          907       (1)               907       (1) 
Add: 
 transaction-related 
 expenses included 
 in other expense, 
 net                            73,779       (2)            79,656       (2) 
                      ----  ----------  ---       ---  -----------  --- 
Adjusted income 
 before income 
 taxes                   $      51,200              $       65,036 
                      ====  ==========  ===       ===  ===========  === 
 

__________

(1) Comprises costs incurred due to accelerated RSU vestings and other compensation costs incurred in connection with the Sumitomo Forestry transaction.

(2) Comprises investment banking, legal, advisory, and other professional fees incurred in connection with the Sumitomo Forestry transaction.

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

The following table calculates the non-GAAP financial measures of EBITDA and Adjusted EBITDA and reconciles those amounts to net income available to common stockholders, as reported and prepared in accordance with GAAP. EBITDA means net income available to common stockholders before (a) interest expense, (b) expensing of previously capitalized interest included in costs of home sales, (c) income taxes and (d) depreciation and amortization. Adjusted EBITDA means EBITDA before (e) amortization of stock-based compensation, (f) impairments and lot option abandonments, (g) Sumitomo Forestry transaction-related expenses included in general and administrative expenses, (h) Sumitomo Forestry transaction-related expenses included in financial services, and (i) other transaction expenses incurred in connection with the Sumitomo Forestry transaction. Other companies may calculate EBITDA and Adjusted EBITDA (or similarly titled measures) differently. We believe EBITDA and Adjusted EBITDA are useful measures of the Company's ability to service debt and obtain financing.

 
                         Three Months Ended June 30,    Six Months Ended June 30, 
                                                       ---------------------------- 
                            2026              2025        2026             2025 
                        -------------       ---------  ----------       ----------- 
                                              (in thousands) 
Net (loss) income 
 available to common 
 stockholders           $(157,698)          $ 60,748   $(150,912)       $124,784 
  Interest expense: 
    Interest incurred      18,326             20,374      36,911          41,693 
    Interest 
     capitalized          (18,326)           (20,374)    (36,911)        (41,693) 
  Amortization of 
   interest in cost of 
   sales                   21,263             25,578      37,733          48,731 
  Provision for income 
   taxes                   (7,646)            23,640      (7,565)         46,133 
  Depreciation and 
   amortization             7,585              7,657      15,203          15,044 
                         --------            -------    --------         ------- 
EBITDA                   (136,496)           117,623    (105,541)        234,692 
  Amortization of 
   stock-based 
   compensation             3,032              8,603       4,989          16,159 
  Impairments and lot 
   option 
   abandonments            19,734             13,096      20,802          14,169 
  Transaction-related 
   expenses included 
   in G&A                 122,112      (1)        --     122,112   (1)        -- 
  Transaction-related 
   expenses included 
   in financial 
   services                   907      (1)        --         907   (1)        -- 
  Transaction expenses     73,779      (2)        --      79,656   (2)        -- 
                         --------            -------    --------         ------- 
Adjusted EBITDA         $  83,068           $139,322   $ 122,925        $265,020 
                         ========            =======    ========         ======= 
 

__________

(1) Comprises costs incurred due to accelerated RSU vestings and other compensation costs incurred in connection with the Sumitomo Forestry transaction.

(2) Comprises investment banking, legal, advisory, and other professional fees incurred in connection with the Sumitomo Forestry transaction.

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