Attached files
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| 8-K - FORM 8-K - HORTON D R INC /DE/ | d475731d8k.htm |
Exhibit 99.1
Jessica Hansen, Vice President of Communications
301 Commerce Street, Ste. 500, Fort Worth, Texas 76102
817-390-8200
January 29, 2013
D.R. HORTON, INC., AMERICA’S BUILDER, REPORTS FISCAL 2013 FIRST QUARTER EARNINGS
FORT WORTH, TEXAS – D.R. Horton, Inc. (NYSE:DHI), America’s Builder, today reported that net income for its first fiscal quarter ended December 31, 2012 increased 139% to $66.3 million, or $0.20 per diluted share. Net income for the same quarter of fiscal 2012 was $27.7 million, or $0.09 per diluted share. Homebuilding revenue for the first quarter of fiscal 2013 increased 39% to $1.2 billion from $0.9 billion in the same quarter of 2012. Homes closed in the quarter increased 26% to 5,182, compared to 4,118 homes in the year-ago quarter.
Net sales orders for the first quarter ended December 31, 2012 increased 39% to 5,259 homes from 3,794 homes in the year-ago quarter and the value of net sales orders increased 60% to $1.3 billion from $0.8 billion. The Company’s cancellation rate (cancelled sales orders divided by gross sales orders) for the first quarter of fiscal 2013 was 22%. The Company’s sales order backlog of homes under contract at December 31, 2012 increased 62% to 7,317 homes from 4,530 homes at December 31, 2011. The value of the backlog increased 80% to $1.8 billion at December 31, 2012 from $1.0 billion a year ago.
The Company ended the quarter with $643.1 million of homebuilding unrestricted cash and marketable securities and net homebuilding debt to total capital of 33.0%. Net homebuilding debt to total capital consists of homebuilding notes payable net of cash and marketable securities divided by total equity plus homebuilding notes payable net of cash and marketable securities.
Donald R. Horton, Chairman of the Board, said, “This quarter was our most profitable first quarter since 2007, with $107.9 million of pre-tax income, a 270% increase from the year-ago quarter. We experienced substantial increases in the number of homes sold, closed and in backlog compared to the year-ago quarter. At the same time, our average sales price has increased due to pricing power, geographic mix and larger average home size. As a result, we achieved dollar value increases in homes sold of 60%, homes closed of 38% and backlog of 80%.
“We experienced broad improvement in demand in most of our markets this quarter, and we significantly increased our investments in homes under construction, finished lots, land and land development to capture this increasing demand. D.R. Horton is the best positioned it has been in its 35 year history. We are looking forward to the spring selling season with optimism.”
The Company will host a conference call today (Tuesday, January 29th) at 10:00 a.m. Eastern time. The dial-in number is 877-407-8033, and the call will also be webcast from www.drhorton.com on the “Investors” page.
D.R. Horton, Inc., America’s Builder, is the largest homebuilder in the United States, based on its 19,954 homes closed in the twelve-month period ended December 31, 2012. Founded in 1978 in Fort Worth, Texas, D.R. Horton has operations in 77 markets in 26 states in the East, Midwest, Southeast, South Central, Southwest and West regions of the United States. The Company is engaged in the construction and sale of high quality homes with sales prices ranging from $100,000 to over $600,000. D.R. Horton also provides mortgage financing and title services for homebuyers through its mortgage and title subsidiaries.
Portions of this document may constitute “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Although D.R. Horton believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to D.R. Horton on the date this release was issued. D.R. Horton does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements in this release include that D.R. Horton is the best positioned it has been in its 35 year history and that we are looking forward to the spring selling season with optimism.
Factors that may cause the actual results to be materially different from the future results expressed by the forward-looking statements include, but are not limited to: potential deterioration in homebuilding industry conditions and the current weak U.S. economy; the cyclical nature of the homebuilding industry and changes in general economic, real estate and other conditions; constriction of the credit markets, which could limit our ability to access capital and increase our costs of capital; reductions in the availability of mortgage financing and the liquidity provided by government-sponsored enterprises, the effects of government programs, a decrease in our ability to sell mortgage loans on attractive terms or an increase in mortgage interest rates; the risks associated with our land and lot inventory; home warranty and construction defect claims; supply shortages and other risks for acquiring land, building materials and skilled labor; reductions in the availability of performance bonds; increases in the costs of owning a home; the effects of governmental regulations and environmental matters on our homebuilding operations; the effects of governmental regulation on our financial services operations; our debt obligations and our ability to comply with related debt covenants, restrictions and limitations; competitive conditions within the homebuilding and financial services industries; our ability to effect any future growth strategies successfully; the impact of an inflationary or deflationary environment; our ability to realize the full amount of our deferred income tax asset; and information technology failures and data security breaches. Additional information about issues that could lead to material changes in performance is contained in D.R. Horton’s annual report on Form 10-K which is filed with the Securities and Exchange Commission.
WEBSITE ADDRESS: www.drhorton.com
D.R. HORTON, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
| December 31, | September 30, | |||||||
| 2012 | 2012 | |||||||
| (In millions) | ||||||||
| ASSETS | ||||||||
| Homebuilding: |
||||||||
| Cash and cash equivalents |
$ | 546.4 | $ | 1,030.4 | ||||
| Marketable securities, available-for-sale |
96.7 | 298.0 | ||||||
| Restricted cash |
54.8 | 49.3 | ||||||
| Inventories: |
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| Construction in progress and finished homes |
1,909.5 | 1,682.7 | ||||||
| Residential land and lots—developed and under development |
2,475.7 | 1,838.4 | ||||||
| Land held for development |
629.9 | 644.1 | ||||||
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| 5,015.1 | 4,165.2 | |||||||
| Income taxes receivable |
— | 14.4 | ||||||
| Deferred income taxes, net of valuation allowance of $41.9 million at December 31, 2012 and September 30, 2012 |
683.5 | 709.5 | ||||||
| Property and equipment, net |
81.9 | 72.6 | ||||||
| Other assets |
454.2 | 456.8 | ||||||
| Goodwill |
38.9 | 38.9 | ||||||
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| 6,971.5 | 6,835.1 | |||||||
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| Financial Services: |
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| Cash and cash equivalents |
20.5 | 17.3 | ||||||
| Mortgage loans held for sale |
307.9 | 345.3 | ||||||
| Other assets |
47.4 | 50.5 | ||||||
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| 375.8 | 413.1 | |||||||
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| $ | 7,347.3 | $ | 7,248.2 | |||||
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| LIABILITIES | ||||||||
| Homebuilding: |
||||||||
| Accounts payable |
$ | 241.8 | $ | 216.2 | ||||
| Accrued expenses and other liabilities |
856.6 | 893.8 | ||||||
| Notes payable |
2,424.3 | 2,305.3 | ||||||
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| 3,522.7 | 3,415.3 | |||||||
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| Financial Services: |
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| Accounts payable and other liabilities |
42.1 | 50.4 | ||||||
| Mortgage repurchase facility |
169.4 | 187.8 | ||||||
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| 211.5 | 238.2 | |||||||
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| 3,734.2 | 3,653.5 | |||||||
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| EQUITY | ||||||||
| Common stock |
3.3 | 3.3 | ||||||
| Additional paid-in capital |
1,992.2 | 1,979.8 | ||||||
| Retained earnings |
1,749.2 | 1,743.1 | ||||||
| Treasury stock, at cost |
(134.3 | ) | (134.3 | ) | ||||
| Accumulated other comprehensive income |
— | 0.2 | ||||||
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| 3,610.4 | 3,592.1 | |||||||
| Noncontrolling interests |
2.7 | 2.6 | ||||||
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| 3,613.1 | 3,594.7 | |||||||
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| $ | 7,347.3 | $ | 7,248.2 | |||||
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D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
| Three Months Ended | ||||||||
| December 31, | ||||||||
| 2012 | 2011 | |||||||
| (In millions, except per share data) | ||||||||
| Homebuilding: |
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| Revenues: |
||||||||
| Home sales |
$ | 1,223.3 | $ | 884.3 | ||||
| Land/lot sales and other |
9.9 | 1.3 | ||||||
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| 1,233.2 | 885.6 | |||||||
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| Cost of sales: |
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| Home sales |
992.8 | 735.6 | ||||||
| Land/lot sales and other |
8.2 | — | ||||||
| Inventory impairments and land option cost write-offs |
1.3 | 1.4 | ||||||
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| 1,002.3 | 737.0 | |||||||
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| Gross profit: |
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| Home sales |
230.5 | 148.7 | ||||||
| Land/lot sales and other |
1.7 | 1.3 | ||||||
| Inventory impairments and land option cost write-offs |
(1.3 | ) | (1.4 | ) | ||||
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| 230.9 | 148.6 | |||||||
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| Selling, general and administrative expense |
140.8 | 119.0 | ||||||
| Interest expense |
3.2 | 6.9 | ||||||
| Gain on early retirement of debt, net |
— | (0.1 | ) | |||||
| Other (income) |
(3.3 | ) | (2.2 | ) | ||||
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| Operating income from Homebuilding |
90.2 | 25.0 | ||||||
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| Financial Services: |
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| Revenues, net of recourse and reinsurance expense |
41.9 | 21.0 | ||||||
| General and administrative expense |
25.7 | 18.9 | ||||||
| Interest expense |
1.0 | 0.9 | ||||||
| Interest and other (income) |
(2.5 | ) | (3.0 | ) | ||||
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| Operating income from Financial Services |
17.7 | 4.2 | ||||||
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| Income before income taxes |
107.9 | 29.2 | ||||||
| Income tax expense |
41.6 | 1.5 | ||||||
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| Net income |
$ | 66.3 | $ | 27.7 | ||||
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| Other comprehensive income (loss), net of income tax: |
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| Unrealized (loss) gain related to available-for-sale securities |
(0.1 | ) | 0.1 | |||||
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| Comprehensive income |
$ | 66.2 | $ | 27.8 | ||||
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| Basic: |
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| Net income per share |
$ | 0.21 | $ | 0.09 | ||||
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| Weighted average number of common shares |
321.1 | 316.3 | ||||||
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| Diluted: |
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| Net income per share |
$ | 0.20 | $ | 0.09 | ||||
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| Numerator for diluted income per share after assumed conversions |
$ | 72.0 | $ | 27.7 | ||||
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| Adjusted weighted average number of common shares |
364.1 | 316.5 | ||||||
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| Other Consolidated Financial Data: |
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| Interest amortized to home and land/lot cost of sales |
$ | 24.9 | $ | 20.4 | ||||
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| Depreciation and amortization |
$ | 4.8 | $ | 5.0 | ||||
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| Interest incurred |
$ | 38.1 | $ | 28.8 | ||||
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D.R. HORTON, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
| Three Months Ended | ||||
| December 31, 2012 | ||||
| (In millions) | ||||
| Operating Activities |
||||
| Net income |
$ | 66.3 | ||
| Adjustments to reconcile net income to net cash used in operating activities: |
||||
| Depreciation and amortization |
4.8 | |||
| Amortization of discounts and fees |
10.4 | |||
| Stock based compensation expense |
3.5 | |||
| Deferred income taxes |
35.2 | |||
| Gain on sale of marketable securities |
(0.2 | ) | ||
| Inventory impairments and land option cost write-offs |
1.3 | |||
| Changes in operating assets and liabilities: |
||||
| Increase in construction in progress and finished homes |
(226.8 | ) | ||
| Increase in residential land and lots — developed, under development, and held for development |
(612.8 | ) | ||
| Decrease in other assets |
22.8 | |||
| Decrease in income taxes receivable |
14.4 | |||
| Decrease in mortgage loans held for sale |
37.4 | |||
| Decrease in accounts payable, accrued expenses and other liabilities |
(12.8 | ) | ||
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| Net cash used in operating activities |
(656.5 | ) | ||
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| Investing Activities |
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| Purchases of property and equipment |
(14.0 | ) | ||
| Purchases of marketable securities |
(26.8 | ) | ||
| Proceeds from the sale or maturity of marketable securities |
226.7 | |||
| Increase in restricted cash |
(5.5 | ) | ||
| Net principal increase of other mortgage loans and real estate owned |
(0.2 | ) | ||
| Purchases of debt securities collateralized by residential real estate |
(18.6 | ) | ||
| Payment related to acquisition of a business |
(9.4 | ) | ||
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| Net cash provided by investing activities |
152.2 | |||
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| Financing Activities |
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| Proceeds from notes payable |
100.0 | |||
| Repayment of notes payable |
(18.4 | ) | ||
| Proceeds from stock associated with certain employee benefit plans |
2.1 | |||
| Cash dividends paid |
(60.2 | ) | ||
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| Net cash provided by financing activities |
23.5 | |||
| Decrease in Cash and Cash Equivalents |
(480.8 | ) | ||
| Cash and cash equivalents at beginning of period |
1,047.7 | |||
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| Cash and cash equivalents at end of period |
$ | 566.9 | ||
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D.R. HORTON, INC.
($’s in millions)
NET SALES ORDERS
| Three Months Ended December 31, | ||||||||||||||||
| 2012 | 2011 | |||||||||||||||
| Homes | Value | Homes | Value | |||||||||||||
| East |
528 | $ | 141.4 | 509 | $ | 115.3 | ||||||||||
| Midwest |
275 | 89.9 | 213 | 59.1 | ||||||||||||
| Southeast |
1,584 | 353.5 | 921 | 181.1 | ||||||||||||
| South Central |
1,641 | 330.6 | 1,299 | 233.2 | ||||||||||||
| Southwest |
247 | 53.2 | 249 | 46.9 | ||||||||||||
| West |
984 | 345.5 | 603 | 187.6 | ||||||||||||
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| 5,259 | $ | 1,314.1 | 3,794 | $ | 823.2 | |||||||||||
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HOMES CLOSED
| Three Months Ended December 31, | ||||||||||||||||
| 2012 | 2011 | |||||||||||||||
| Homes | Value | Homes | Value | |||||||||||||
| East |
517 | $ | 137.4 | 495 | $ | 118.8 | ||||||||||
| Midwest |
287 | 89.4 | 213 | 57.7 | ||||||||||||
| Southeast |
1,374 | 291.3 | 1,013 | 195.6 | ||||||||||||
| South Central |
1,619 | 309.3 | 1,492 | 266.7 | ||||||||||||
| Southwest |
383 | 76.0 | 279 | 54.0 | ||||||||||||
| West |
1,002 | 319.9 | 626 | 191.5 | ||||||||||||
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| 5,182 | $ | 1,223.3 | 4,118 | $ | 884.3 | |||||||||||
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SALES ORDER BACKLOG
| As of December 31, | ||||||||||||||||
| 2012 | 2011 | |||||||||||||||
| Homes | Value | Homes | Value | |||||||||||||
| East |
674 | $ | 174.6 | 620 | $ | 144.1 | ||||||||||
| Midwest |
413 | 127.9 | 288 | 81.9 | ||||||||||||
| Southeast |
2,419 | 527.1 | 1,193 | 232.4 | ||||||||||||
| South Central |
2,254 | 454.8 | 1,517 | 276.0 | ||||||||||||
| Southwest |
563 | 112.1 | 396 | 69.5 | ||||||||||||
| West |
994 | 362.2 | 516 | 171.1 | ||||||||||||
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| 7,317 | $ | 1,758.7 | 4,530 | $ | 975.0 | |||||||||||
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