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TRI Pointe Group, Inc. (TPH)
Q4 2017 Earnings Conference Call
February 20, 2018 10:00 AM ET
Doug Bauer - CEO
Mike Grubbs - CFO
Tom Mitchell - President and COO
Chris Martin - VP, Finance and IR
Alan Ratner - Zelman and Associates
Christopher Shook - Evercore
Mike Dahl - Barclays
Stephen East - Wells Fargo
Soham Bhonsle - SIG
Nishu Sood - Deutsche Bank
Jay McCanless - WedBush
Mark Weintraub - Buckingham Research
Will Randow - Citigroup
Alex Barron - Housing Research Center
Previous Statements by TPH
» TRI Pointe's (TPH) CEO Doug Bauer on Q3 2017 Results - Earnings Call Transcript
» TRI Pointe's (TPH) CEO Doug Bauer on Q2 2017 Results - Earnings Call Transcript
» TRI Pointe's (TPH) CEO Doug Bauer on Q1 2017 Results - Earnings Call Transcript
» TRI Pointe's (TPH) CEO Doug Bauer on Q4 2016 Results - Earnings Call Transcript
I would now like to turn the conference over to Chris Martin, Vice President of Finance and Investor Relations. Thank you. You may begin.
Good morning and welcome to TRI Pointe Group's earnings conference call. Earlier today, the company released its financial results for the fourth quarter and full year ending December 31, 2017. Documents detailing these results, including a slide deck under the Presentations tab are available on the company's Investor Relations web site at www.tripointegroup.com.
Before the call begins, I would like to remind everyone that certain statements made in the course of this call, which are not historical facts, including statements concerning future financial and operating performance, are forward-looking statements that involve risks and uncertainties. A discussion of such risks and uncertainties and other important factors, that could cause actual operating results to differ materially from those described in the forward-looking statements are detailed in the company's filings made with the SEC, including in its most recent Annual Report on Form 10-K and its quarterly report on Form 10-Q.
Except as required by law, the company undertakes no duty to update these forward-looking statements that are made during the course of this call. Additionally, non-GAAP financial measures will be discussed on this conference call. Reconciliations of these non-GAAP financial measures to the most comparable measures prepared in accordance with GAAP can be accessed through the TRI Pointe's web site and in its filings with the SEC.
Hosting the call today is Doug Bauer, the company's Chief Executive Officer; Mike Grubbs, the company's Chief Financial Officer; and Tom Mitchell, the company's Chief Operating Officer and President.
With that, I will now turn the call over to Doug.
Thank you, Chris, and good morning to everyone joining us in today's call. I will start by reviewing our fourth quarter and full year 2017 results, and also provide some insight into where our business stands and where it is headed.
Throughout the year, 2017 presented Tri Pointe Group with a unique set of opportunities and challenges. On the positive front, Tri Pointe Group benefitted from a study [ph] improving domestic economy, increased consumer confidence and strong housing fundamentals in the markets in which we build.
Challenges included material cost increases and scarcity of trade labor and weather related events in both California and Texas, that deeply impacted the life in the affected areas.
As evidenced by our full year results, Tri Pointe Group was able to make the most out of its opportunities in 2017, and found effective solutions to adversity when it arose. Highlights for 2017 included year-over-year net new home order growth of 19% and home sales revenue growth of 17%. We also reduced our SG&A expense as a percentage of home sales revenue by 70 basis points to 10.1%, the lowest in our company's history.
Additionally, we ended the year with a backlog dollar value of approximately $1 billion, which was an increase of 56% from the end of 2016.
We are proud of our accomplishments in 2017 and believe that Tri Pointe Group can build on these successes in the coming years, as we continue to capitalize on favorable, industry fundamentals, and execute a unique and differentiated operating strategy. Tri Pointe Group is different by design, and we believe that this mindset drives us to be an industry innovator and create value for our customer and shareholders.
While many in the industry look for ways to commoditize the home buying experience, Tri Pointe Group has taken the opposite approach. We believe that home buying customers are looking for a unique experience, including communities and homes that cater to their wants, needs and lifestyles. That is why we put an emphasis on thoughtful community planning and unique home buying, that center around the customer and location. We feel that this emphasis has been a driving factor, behind our ability to generate average sales prices for new home order rates in excess of our publicly traded homebuilder peer group average.
Tri Pointe Group will also understand, that each buyers and their life stage is unique. New home features and community amenities that appeal to millennial young family, often distinctly different than [indiscernible] appeal to empty nest or baby boomers. We are constantly studying the buying patterns and consumer preferences of the different homebuyer segment, so that each of our communities reflect these distinct trends. Our research has resulted in truly innovative new home concepts, that challenge the status quo in homebuilding, from our attainable, millennial oriented responsive homes, which feature lock-off suites and cutting edge home smart connected technology, to our Life 260 Concept, which redefines how and where baby boomers spend the next chapter of their lives. We believe these innovative, consumer oriented concepts will continue to be a big driver of our success in each of our markets.