KB Home reports Q4 income of US$7.7M, down 45% compared with Q4 2011, which included gains from loan guaranty, financial services; revenues up 20% to US$578.2M on higher selling prices, volume of delivered homes
Allison Oesterle
LOS ANGELES
,
December 20, 2012
(press release)
–
Fourth Quarter Revenues Increase 20%; Earnings Per Share of $.10 KB HOME CONSOLIDATED STATEMENTS OF OPERATIONS For the Twelve Months and Three Months Ended November 30, 2012 and 2011 (In Thousands, Except Per Share Amounts) ) ) )
Backlog Value Up 35% to $618.6 Million, Reflecting Growth in All Homebuilding Regions
KB Home (NYSE: KBH), one of the nation's largest and most recognized homebuilders, today reported results for its fourth quarter and fiscal year ended November 30, 2012. Highlights and developments include the following:
Three Months Ended November 30, 2012
Twelve Months Ended November 30, 2012
Backlog and Net Orders
Balance Sheet
Management Comments
"Our results for the fourth quarter reflect year-over-year and sequential improvement in most of our key operational and financial metrics," said Jeffrey Mezger, president and chief executive officer. "We increased our deliveries and generated solid top-line growth, a higher housing gross profit margin and continued improvement in our selling, general and administrative expense ratio, all of which translated to higher homebuilding operating income. In addition to improved execution on our business strategies, we benefited from better housing market conditions and increased demand for larger homes with more design options, which drove our average selling prices higher in all of our regions. Although our fourth quarter community count decreased from the prior year and impacted our overall net order growth, our net orders on a per-community basis strengthened. By leveraging the investments in land and land development we have made and plan to make next year, we expect to significantly increase the number of new home communities we have open for sales in 2013.
"Furthermore, we are encouraged by the success of our ‘going on offense' initiatives and the improvements we are seeing in housing markets across the country, most notably in California," continued Mezger. "The tightening supply of homes available for sale, high housing affordability and favorable mortgage interest rate environment are driving increased demand and providing us with more opportunities to generate greater revenues. We anticipate housing demand will continue to strengthen, particularly as more households facing rising rental costs consider the benefits of homeownership and emerge from the sidelines. Although the strength of the economy and pending federal budget decisions are important considerations that could potentially disrupt the housing recovery and cause us to shift our current plans, we believe that, with our higher backlog, more community openings on the horizon, and the continued improvement we are expecting in our performance as we move ahead, we are well positioned to be profitable for 2013."
Earnings Conference Call
The conference call on the fourth quarter 2012 earnings will be broadcast live TODAY at 8:30 a.m. Pacific Standard Time, 11:30 a.m. Eastern Standard Time. To listen, please go to the Investor Relations section of the Company's website at www.kbhome.com.
About KB Home
KB Home is one of the largest and most recognized homebuilding companies in the United States. Since its founding in 1957, the Company has built more than half a million quality homes. KB Home's signature Built to Order™ approach lets each buyer customize their new home from lot location to floor plan and design features. In addition to meeting strict ENERGY STAR® guidelines, all KB homes are highly energy efficient to help lower monthly utility costs for homeowners, which the Company demonstrates with its proprietary KB Home Energy Performance Guide® (EPG®). A leader in utilizing state-of-the-art sustainable building practices, KB Home was named the #1 Green Homebuilder in the most recent study by Calvert Investments and the #1 Homebuilder on FORTUNE magazine's 2011 World's Most Admired Companies list. Los Angeles-based KB Home was the first homebuilder listed on the New York Stock Exchange, and trades under the ticker symbol "KBH." For more information about KB Home's new home communities, call 888-KB-HOMES or visit www.kbhome.com.
Forward-Looking and Cautionary Statements
Certain matters discussed in this press release, including any statements that are predictive in nature or concern future market and economic conditions, business and prospects, our future financial and operational performance, or our future actions and their expected results are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Forward-looking statements are based on current expectations and projections about future events and are not guarantees of future performance. We do not have a specific policy or intent of updating or revising forward-looking statements. Actual events and results may differ materially from those expressed or forecasted in forward-looking statements due to a number of factors. The most important risk factors that could cause our actual performance and future events and actions to differ materially from such forward-looking statements include, but are not limited to: general economic, employment and business conditions; adverse market conditions that could result in additional impairments or abandonment charges and operating losses, including an oversupply of unsold homes, declining home prices and increased foreclosure and short sale activity, among other things; conditions in the capital and credit markets (including residential consumer mortgage lending standards, the availability of residential consumer mortgage financing and mortgage foreclosure rates); material prices and availability; labor costs and availability; changes in interest rates; inflation; our debt level, including our ratio of debt to total capital, and our ability to adjust our debt level and structure and to access the equity, credit, capital or other financial markets or other external financing sources, including raising capital through the public or private issuance of common stock, debt or other securities, and/or obtaining a credit facility or project financing, on favorable terms; weak or declining consumer confidence, either generally or specifically with respect to purchasing homes; competition for home sales from other sellers of new and existing homes, including sellers of homes obtained through foreclosures or short sales; weather conditions, significant natural disasters and other environmental factors; government actions, policies, programs and regulations directed at or affecting the housing market (including, but not limited to, the Dodd-Frank Act, tax credits, tax incentives and/or subsidies for home purchases, tax deductions for residential consumer mortgage interest payments and property taxes, tax exemptions for profits on home sales, and programs intended to modify existing mortgage loans and to prevent mortgage foreclosures), the homebuilding industry, or construction activities; decisions by lawmakers on federal fiscal policies, including those relating to taxation and government spending; the availability and cost of land in desirable areas; our warranty claims experience with respect to homes previously delivered and actual warranty costs incurred; legal or regulatory proceedings or claims; our ability to use/realize the net deferred tax assets we have generated; our ability to successfully implement our current and planned product, geographic and market positioning (including, but not limited to, our efforts to expand our inventory base/pipeline with desirable land positions or interests at reasonable cost and to open new communities for sales and sell higher-priced homes and design options, and our operational and investment concentration in markets in California and Texas), revenue growth, asset optimization, and overhead and other cost reduction strategies; consumer traffic to our new home communities and consumer interest in our product designs; home purchase contract cancellations and our ability to realize our backlog; our home sales and delivery performance in key markets in California and Texas; the manner in which our homebuyers are offered and are able to obtain residential consumer mortgage loans and mortgage banking services, including from our preferred mortgage lender, Nationstar Mortgage; the performance of Nationstar Mortgage as our preferred mortgage lender; information technology failures and data security breaches; and other events outside of our control. Please see our periodic reports and other filings with the Securities and Exchange Commission for a further discussion of these and other risks and uncertainties applicable to our business.
Twelve Months
Three Months
2012
2011
2012
2011
Total revenues
$
1,560,115
$
1,315,866
$
578,201
$
479,872
Homebuilding:
Revenues
$
1,548,432
$
1,305,562
$
574,377
$
475,746
Costs and expenses
(1,568,688
)
(1,408,636
)
(558,815
)
(474,911
)
Operating income (loss)
(20,256
)
(103,074
)
15,562
835
Interest income
518
871
155
95
Interest expense
(69,804
)
(49,204
)
(15,989
)
(12,302
)
Equity in income (loss) of unconsolidated joint ventures
(394
)
(55,839
)
(357
)
26
Homebuilding pretax loss
(89,936
)
(207,246
)
(629
)
(11,346
)
Financial services:
Revenues
11,683
10,304
3,824
4,126
Expenses
(2,991
)
(3,512
)
(754
)
(1,031
)
Equity in income (loss) of unconsolidated joint venture
2,191
19,286
(17
)
19,662
Financial services pretax income
10,883
26,078
3,053
22,757
Total pretax income (loss)
(79,053
)
(181,168
)
2,424
11,411
Income tax benefit
20,100
2,400
5,300
2,500
Net income (loss)
$
(58,953
$
(178,768
)
$
7,724
$
13,911
Basic earnings (loss) per share
$
(.76
$
(2.32
)
$
.10
$
.18
Diluted earnings (loss) per share
$
(.76
$
(2.32
)
$
.10
$
.18
Basic average shares outstanding
77,106
77,043
77,103
77,159
Diluted average shares outstanding
77,106
77,043
78,282
77,197
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