Item 8.01 Other Events
Workforce Reduction Plan
On May 13, 2020, TRI Pointe Group, Inc., a Delaware corporation (the "Company"),
committed to a workforce reduction plan that was predominantly implemented on
May 13-14, 2020. The workforce reduction plan was adopted due to the existing
and anticipated future impact of the COVID-19 pandemic on the Company's
business. The Company expects to incur approximately $5 to $6 million of pre-tax
restructuring and related charges consisting of severance and related costs,
which the Company expects to incur during the second quarter of 2020. The
Company anticipates that the workforce reduction will decrease overhead expenses
by approximately $33 million on an annualized basis, of which the Company
expects to realize approximately $21 million over the remainder of 2020.
Temporary Reduction in Base Salaries for Management
Due to the impact of COVID-19 on the Company's business, with approval of the
Company's Board of Directors (the "Board"), the Company's named executive
officers have agreed to a reduction of their respective base salaries, as
follows: (i) the base salaries of Douglas F. Bauer, the Company's Chief
Executive Officer, and Thomas J. Mitchell, the Company's Chief Operating Officer
and President, have been reduced by 20%; and (ii) the base salaries of Glenn J.
Keeler, the Company's Chief Financial Officer, Chief Accounting Officer and
Treasurer, and David C. Lee, the Company's Vice President, General Counsel and
Secretary, have been reduced by 10%. Other members of the Company's senior
management team and the Company's division presidents also agreed to a 10%
reduction of their base salaries. The foregoing base salary reductions for the
Company's named executive officers, other members of the Company's senior
management team and the Company's division presidents are effective for three
months.
Temporary Reduction in Director Cash and Incentive Compensation
Further, due to the impact of COVID-19 on the Company's business, the Board
approved the following reductions to non-employee director compensation: (i)
with respect to the annual cash retainer and Board and committee fees (which
retainer and fees are payable pro rata on a quarterly basis), a 50% reduction in
the portion of such amounts that are payable for the second, third and fourth
quarters of 2020; and (ii) a reduction of the annual restricted stock unit award
from $140,000 to $100,000.
Forward-Looking Statements
The Company's public communications and SEC filings may contain statements
related to future, not past, events. These forward-looking statements are
generally accompanied by words such as "anticipate," "believe," "could,"
"estimate," "expect," "future," "goal," "intend," "likely," "may," "might,"
"plan," "potential," "predict," "project," "should," "strategy," "target,"
"will," "would," or other words that convey the uncertainty of future events or
outcomes. These forward-looking statements may include, but are not limited to,
statements regarding the Company's strategy, projections and estimates
concerning the timing and success of specific projects and the Company's future
production, land and lot sales, the outcome of legal proceedings, the
anticipated impact of natural disasters or contagious diseases on its
operations, operational and financial results, including its estimates for
growth, financial condition, sales prices, prospects and capital spending.
The major risks and uncertainties-and assumptions that are made-that affect the
Company's business and may cause actual results to differ from these
forward-looking statements include, but are not limited to: the effects of the
ongoing COVID-19 pandemic, which are highly uncertain, cannot be predicted and
will depend upon future developments, including the severity of COVID-19 and the
duration of the outbreak, the duration of existing social distancing and
shelter-in-place orders, further mitigation strategies taken by applicable
government authorities, the availability of a vaccine, adequate testing and
treatments and the prevalence of widespread immunity to COVID-19; the effect of
general economic conditions, including employment rates, housing starts,
interest rate levels, availability of financing for home mortgages and strength
of the U.S.; market demand for the Company's 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 the Company's ability to control, purchase, hold and develop such parcels;
access to adequate capital on acceptable terms; geographic concentration of the
Company's operations, particularly within California; levels of competition; the
successful execution of the Company's internal performance plans, including
restructuring and cost reduction initiatives; raw material and labor prices and
availability; oil and other energy prices; the effect of U.S. trade policies,
including the imposition of tariffs and duties on homebuilding products and
retaliatory measures taken by other countries; the effect of weather, including
the re-occurrence of drought conditions in California; 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 or outbreaks of contagious diseases, such as COVID-19; transportation
costs; U.S. federal and state tax policies; the effect of land use, environment
and other governmental laws and regulations; legal proceedings or disputes and
the adequacy
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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 the
Company's computer systems, theft of the Company's homebuyers' confidential
information or other forms of cyber-attack; and the other factors that are
described in "Risk Factors" in the Company's Annual Report on Form 10-K for the
year ended December 31, 2019, filed with the SEC on February 19, 2020, and under
Part II, Item 1A, of the Company's Quarterly Report on Form 10-Q for the quarter
ended March 31, 2020, filed with the SEC on April 23, 2020, as such descriptions
may be updated or amended in any future reports the Company files with the SEC.
These or other uncertainties may cause the Company's actual future results to be
materially different than those expressed in its forward-looking statements.
Forward-looking statements speak only as of the date they were made, and the
Company does not undertake to update them.
Item 9.01 Financial Statements and Exhibits
(d) Exhibits
104 Cover Page Interactive Data File, formatted in Inline XBRL
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