Inve vestor r Prese sent ntati ation September 2020 Build A Better Life
Dis isclaimer our business and investment strategy; current or future financing arrangements; and This presentation contains forward-looking availability of land to acquire and our ability to availability of qualified personnel and our statements within the meaning of the Private acquire such land on acceptable terms or at all; ability to retain our key personnel. You should Securities Litigation Reform Act of 1995 availability, terms and deployment of capital; not rely upon forward-looking statements as related to management’s expectations about continued or increased disruption in the predictions of future events. Although our future conditions. Actual business, market or availability of mortgage financing or the management believe that the expectations other conditions may differ materially from number of foreclosures in the market; shortages reflected in our forward-looking statements management’s expectations and, accordingly, of or increased prices for labor, land or raw are reasonable, we cannot guarantee that the may affect our sales and profitability or other materials used in housing construction; delays future results, levels of activity, performance results and liquidity. Actual results may differ in land development or home construction or events and circumstances described in the materially due to various other factors, resulting from adverse weather conditions or forward-looking statements will be achieved including: economic changes either other events outside our control; issues or occur. These forward-looking statements nationally or in the markets in which we concerning our joint venture partnerships; the speak only as of the date of this presentation. operate, including declines in employment, cost and availability of insurance and surety We assume no obligation to update any levels of volatility in mortgage interest rates bonds; changes in, or the failure or inability to forward-looking information contained in and inflation; continued or increased comply with, governmental laws and this presentation. Additional information downturn in the homebuilding industry; regulations; the timing of receipt of regulatory concerning these and other factors may be continued volatility and uncertainty in the approvals and the opening of projects; the found in our filings with the Securities and credit markets and broader financial markets; degree and nature of our competition; our Exchange Commission, including the “Risk our limited operating history; our future leverage and debt service obligations; restrictive Factors” in our most recent Annual Report operating results, financial condition and covenants relating to our operations in our on Form 10-K. liquidity; our business operations; changes in 2
Execu Executiv ive e Team Team Larry Web ebb Leonard Miller John Steph John Stephens ens Executive Chairman President & Chief Executive Officer EVP & Chief Financial Officer Rel elevant Exp xperie rience ce • Transitioned to CEO role • The New Home Company • Former CEO, The New effective August 30, 2019 (2015-Present) Home Company (2009-2019) • Former CFO of M.D.C. • Former COO, The New • Founder, The New Home Holdings, Inc. (2012-2015) Home Company (2017-2019) Company (2009-Present) • Former CFO of Standard • Former Co-Chief • Former California Regional Pacific Corp. (2009-2011); Restructuring Officer of President for Richmond Also former SVP, Treasurer & Land Source (2008-2009) American Homes, a Corporate Controller subsidiary of M.D.C. (1996-2009) • Former CEO of John Laing Holdings, Inc. (2004-2017) Homes (1995-2008) 3
The The New New Home Home Company Company Overvi Overview ew New gener eration ion homebu omebuil ilder der Focus ocus on premi emier er loca cati tion ons s Strong relat St lation ionsh ships ips foun unded ed in 2009 2009 in high-growth, land-constrained with land sellers/developers markets; California focus with and trade partners • Different by design expansion into Arizona • Initial capital from founders • IPO in 2014 Broa oad and nd flexible ible prod oduct uct Awar ward-wi winnin ing homes mes and nd capa pabil biliti ities s with an established comm mmunit nitie ies; s; expertise in high-end segment and a recent design and architecture emphasis on more affordable price segments 4
West West Co Coast ast Focused Focused Home Sales Revenue 33% 33% 12% 12% Arizona Norther ern Calif lifornia ia $466M 55% 55% Souther ern Calif lifornia ia Wholly Owned Lots ts Owned & Controlled 29% 29% 34% Active vely ly Sel elling ng Communiti unities es in Southern hern Norther ern California nia, Northern n Calif ifor ornia nia, and Arizona ona Arizona Calif ifornia ia 2,239 Lots 36% 36% Souther ern Note: All data as of 6/30/20. Home sales revenue for the last twelve months ended 6/30/20 Calif ifornia ia 5
Recent Recent Events Events Str Stron ong Ju July ly and d Augus gust t $12 124M 4M LTM M ope perati ting ng Right ight-si sized zed ov over erhead ad absor bsorptio ption pa pace ce resulted cash shflow low led d to $80M 0M cost stru truct cture ure through debt de bt paydow paydown and reduced in a 100% increase in net more efficient sales & orders for the first two Q2’20 net debt -to-capital marketing spending months of Q3 compared ratio to 51.5% from 60.1% and lower personnel to the prior year high watermark in Q1’19 costs (860 bps reduction) 6
Monthly ly Absorptio ion Pace 3.4 3.2 2.2 2.0 Year-Over-Year 18% (8%) 88% 64% Change % Q1'20 Q2'20 Jul'20 Aug'20 7
The The New New Home Home Compan Company y Upda Update $466m 66mm 534 534 $873 73k Home Sales Revenue Deliveries ASP 25 25 2,23 239 $37m 7mm Actively Selling Communities Lots Owned & Controlled Adj. EBITDA Note: All data for last twelve months as of 6/30/2020 except actively selling communities and lots owned and controlled which are as of 6/30/2020. 8
New Home’s Investment Highlights 1 Premium brand rewarded for customer service, quality and design 2 Strategically positioned in highly attractive submarkets 3 Diversified product offering Focused on cash flow generation 4 and reducing leverage 5 Repositioned balance sheet with focus on margin improvement 6 Fee business leverages overhead and adds supplemental profits 9
Premi Premium um Brand Brand • The he New w Home ome Com ompa pany y is is a Pre remium ium Bran and d and nd wi will ll le leve verag age it its s expe perti tise se across ss pr produc oduct t se segme gments ts • New Home has expanded its portfolio to include more affordable product offerings in strong locations, but remains committed to its premium brand through The New Home Difference: 10
Highly Highly Attr Attract active ive Subma Submarket rkets • The he New w Home ome Compan mpany will ll lever verag age e its Prem emium ium Bran and wher ere e it can an be rewar arded ed for or its expe xpertis tise : o Southern CA: Irvine, Rancho Mission Viejo, Great Well located, highly Park, Civita, Bedford amenitized master o Northern CA: Russell Ranch & Whitney Ranch o AZ: Eastmark & Estrella plan communities Southern CA: Coastal & Inland Empire “A” Markets o Exceptional locations o Northern CA: Clover Valley, Granite Bay, Urban Sacramento & Rocklin o AZ: Central, Southeast & Southwest Valleys o Southern CA: Lambert Ranch & Parkside Placemaking: o Northern CA: McKinley Village Mini-Master Plans o AZ: Mosaic & Mariposa 11
Recent New w Co Communit ity Successes Amenitized Exceptional Placemaking MP Location Sterling (Rancho Mission Viejo, CA) ➢ 60 homesites priced in the $1.0M range (2,500 sq. ft.) ➢ Opened in late March without a grand opening event ➢ Utilized virtual tours, social media and online sales concierge, as well as highly personalized private tours, to present the model homes ➢ Monthly absorption of 6.3 homes per month since opening late March 12
Recent New w Co Communit ity Successes Amenitized Exceptional Placemaking MP Location Silver Crest (Folsom, CA) ➢ Grand Opening event in late February ➢ 2 nd Move Up Community with $900k ASP in Sacramento area ➢ Sold consistently at an absorption pace of 2.9 homes per month even through stay-at-home order 13
Recent New w Co Communit ity Successes Amenitized Exceptional Placemaking MP Location Mosaic (Gilbert, AZ) ➢ NWHM’s first entry level community in AZ ($350k ASP) ➢ Medium-Density Mini Master Plan ➢ 3 Product Types totaling 222 homes: Row Towns, Backyard Towns and Flats ➢ Sold 54 homes since models completed in late May (4.5/month per product line) 14
Focus on C Cash Flow Genera ration Operating Cash Flow LTM Operating Cash Flow: -$59M LTM Operating Cash Flow: $124M $63M $63M $40M $40M $31M $17M $5M $5M ($4M) ($12M) ($29M) ($32M) ($74M) M) Q1'18 Q2'18 Q3'18 Q4'18 Q1'19 Q2'19 Q3'19 Q4'19 Q1'20 Q2'20 15
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