D.R. Horton reports fiscal Q4 net income of US$139.5M, up from US$100.1M a year earlier, with homebuilding revenue up 40% to US$1.8B, home closings up 23% to 6,866 units; company well-positioned to grow during ongoing housing recovery, says chairman
Allison Oesterle
FORT WORTH, Texas
,
November 12, 2013
(press release)
–
Fiscal 2013 Fourth Quarter Highlights - as compared to the prior year quarter
Three Months Ended Fiscal Year Ended Fiscal Year Ended $ 956.3 18.8 40.4 18.1 — (709.5 ) (0.1 ) (0.2 ) 6.2 (275.4 ) Increase in residential land and lots – (371.0 ) (37.4 ) (2.0 ) (51.2 ) 113.6 (293.4 ) (33.6 ) (240.8 ) 232.8 (0.2 ) (4.7 ) — — (96.5 ) (143.0 ) 765.9 (17.5 ) 50.9 — (47.8 ) 751.5 315.1 732.6 $ 1,047.7 As of September 30, 2013 2012 Homes Value Homes Value 782 $ 226.3 663 $ 170.5 456 159.4 425 127.4 2,810 703.7 2,209 465.0 2,697 595.8 2,232 433.5 475 96.1 699 134.9 985 428.8 1,012 336.6 8,205 $ 2,210.1 7,240 $ 1,667.9
Fiscal 2013 Highlights - as compared to the prior year
D.R. Horton, Inc. (NYSE:DHI), America’s Builder, today reported that pre-tax income for its fourth fiscal quarter ended September 30, 2013 increased 104% to $202.8 million, compared to $99.2 million in the same quarter of fiscal 2012. The quarterly results included $27.1 million of pre-tax inventory and land option charges to cost of sales, compared to $1.5 million in the same quarter of fiscal 2012. Net income for the fourth fiscal quarter was $139.5 million, or $0.40 per diluted share, compared to $100.1 million, or $0.30 per diluted share, in the same quarter of fiscal 2012. The prior year quarterly results included a non-cash tax benefit of $36.5 million from a reduction of the Company's valuation allowance on its deferred tax assets. Homebuilding revenue for the fourth quarter of fiscal 2013 increased 40% to $1.8 billion from $1.3 billion in the same quarter of 2012. Homes closed in the quarter increased 23% to 6,866, compared to 5,575 homes in the year-ago quarter.
For the fiscal year ended September 30, 2013, the Company's pre-tax income increased 171% to $657.8 million, compared to $242.9 million in the same period of 2012. The fiscal year results included $31.1 million of pre-tax inventory and land option charges to cost of sales, compared to $6.2 million in the prior year. Net income for the fiscal year ended September 30, 2013 was $462.7 million, or $1.33 per diluted share, compared to $956.3 million, or $2.77 per diluted share, in fiscal 2012. The results in fiscal 2012 included a non-cash tax benefit of $753.2 million from a reduction of the Company's valuation allowance on its deferred tax assets. Homebuilding revenue for the fiscal year ended September 30, 2013 increased 44% to $6.1 billion from $4.2 billion in fiscal 2012. Homes closed in fiscal 2013 increased 28% to 24,155, compared to 18,890 homes in fiscal 2012.
Net sales orders for the fourth quarter ended September 30, 2013 decreased 2% to 5,160 homes from 5,276 homes in the year-ago quarter and the value of net sales orders increased 14% to $1.4 billion from $1.3 billion. The Company’s cancellation rate (cancelled sales orders divided by gross sales orders) for the fourth quarter of fiscal 2013 was 31%. Net sales orders for the fiscal year ended September 30, 2013 increased 19% to 25,120 homes from 21,048 homes in fiscal 2012 and the value of net sales orders increased 37% to $6.6 billion from $4.8 billion. The Company’s sales order backlog of homes under contract at September 30, 2013 increased 13% to 8,205 homes from 7,240 homes at September 30, 2012. The value of the backlog increased 33% to $2.2 billion at September 30, 2013 from $1.7 billion a year ago.
The Company ended the year with $913.3 million of homebuilding unrestricted cash and net homebuilding debt to total capital of 36.7%. Net homebuilding debt to total capital consists of homebuilding notes payable net of cash divided by total equity plus homebuilding notes payable net of cash.
Donald R. Horton, Chairman of the Board, said, “Our fourth quarter provided a solid finish to a great year. In fiscal 2013, our homebuilding and financial services operating results improved significantly, with pre-tax income margin increasing 490 basis points to 10.5% from 5.6% last year. In addition, consolidated revenues increased 44% to $6.3 billion for the year, resulting in a 171% increase in pre-tax income to $657.8 million. The number of homes sold, closed and in backlog all increased by double-digit percentages compared to fiscal 2012. Our average sales price increased 15% to $261,400, reflecting increased demand from move-up buyers in addition to pricing power across many of our markets.
“We are well-positioned to continue to profitably grow our operations during the recovery with a strong balance sheet, good liquidity and sufficient inventories of homes and finished lots. Fiscal 2014 is off to a strong start with a beginning backlog of 8,205 homes valued at $2.2 billion and increased year-over-year net sales in October.”
The Company will host a conference call today (Tuesday, November 12th) 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 24,155 homes closed during its fiscal year ended September 30, 2013. Founded in 1978 in Fort Worth, Texas, D.R. Horton has operations in 78 markets in 27 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 $1,000,000. 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 we are well-positioned to continue to profitably grow our operations during the recovery with a strong balance sheet, good liquidity and sufficient inventories of homes and finished lots and that fiscal 2014 is off to a strong start with a beginning backlog of 8,205 homes valued at $2.2 billion and increased year-over-year net sales in October. 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 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 of 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 substantial debt 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 or acquisitions successfully; the effects of the loss of key personnel; the impact of an inflationary or deflationary environment; our ability to realize the full amount of our deferred income tax assets; 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 and our most recent quarterly report on Form 10-Q, both of which are filed with the Securities and Exchange Commission.
WEBSITE ADDRESS: www.drhorton.com
D.R. HORTON, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
September 30,
2013
2012
(In millions)
ASSETS
Homebuilding:
Cash and cash equivalents
$
913.3
$
1,030.4
Marketable securities, available-for-sale
—
298.0
Restricted cash
77.8
49.3
Inventories:
Construction in progress and finished homes
2,498.0
1,682.7
Residential land and lots — developed and under development
3,227.3
1,838.4
Land held for development
472.1
644.1
6,197.4
4,165.2
Income taxes receivable
—
14.4
Deferred income taxes, net
586.6
709.5
Property and equipment, net
106.7
72.6
Other assets
460.5
456.8
Goodwill
38.9
38.9
8,381.2
6,835.1
Financial Services:
Cash and cash equivalents
23.2
17.3
Mortgage loans held for sale
395.1
345.3
Other assets
56.9
50.5
475.2
413.1
Total assets
$
8,856.4
$
7,248.2
LIABILITIES
Homebuilding:
Accounts payable
$
346.4
$
216.2
Accrued expenses and other liabilities
886.0
893.8
Notes payable
3,270.4
2,305.3
4,502.8
3,415.3
Financial Services:
Accounts payable and other liabilities
53.6
50.4
Mortgage repurchase facility
238.6
187.8
292.2
238.2
Total liabilities
4,795.0
3,653.5
EQUITY
Common stock
3.3
3.3
Additional paid-in capital
2,042.0
1,979.8
Retained earnings
2,145.6
1,743.1
Treasury stock, at cost
(134.3
)
(134.3
)
Accumulated other comprehensive income
1.9
0.2
Total stockholders’ equity
4,058.5
3,592.1
Noncontrolling interests
2.9
2.6
Total equity
4,061.4
3,594.7
Total liabilities and equity
$
8,856.4
$
7,248.2
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME
(UNAUDITED)
September 30,
September 30,
2013
2012
2013
2012
(In millions, except per share data)
Homebuilding:
Revenues:
Home sales
$
1,802.0
$
1,288.3
$
6,024.8
$
4,218.4
Land/lot sales and other
15.8
10.5
61.1
17.8
1,817.8
1,298.8
6,085.9
4,236.2
Cost of sales:
Home sales
1,407.2
1,055.6
4,771.5
3,472.9
Land/lot sales and other
12.1
9.2
50.9
13.3
Inventory and land option charges
27.1
1.5
31.1
6.2
1,446.4
1,066.3
4,853.5
3,492.4
Gross profit:
Home sales
394.8
232.7
1,253.3
745.5
Land/lot sales and other
3.7
1.3
10.2
4.5
Inventory and land option charges
(27.1
)
(1.5
)
(31.1
)
(6.2
)
371.4
232.5
1,232.4
743.8
Selling, general and administrative expense
186.6
145.9
649.9
528.7
Interest expense
—
4.9
5.1
23.6
Other (income)
(4.6
)
(4.0
)
(14.9
)
(12.2
)
Homebuilding pre-tax income
189.4
85.7
592.3
203.7
Financial Services:
Revenues, net of recourse and reinsurance expense
42.0
37.4
173.4
117.8
General and administrative expense
31.5
25.6
116.4
85.5
Interest and other (income)
(2.9
)
(1.7
)
(8.5
)
(6.9
)
Financial services pre-tax income
13.4
13.5
65.5
39.2
Income before income taxes
202.8
99.2
657.8
242.9
Income tax expense (benefit)
63.3
(0.9
)
195.1
(713.4
)
Net income
$
139.5
$
100.1
$
462.7
$
956.3
Other comprehensive income (loss), net of income tax:
Unrealized gain (loss) related to available-for-sale securities
—
0.2
(0.2
)
0.1
Unrealized gain related to debt securities collateralized by residential real estate
—
—
1.9
—
Comprehensive income
$
139.5
$
100.3
$
464.4
$
956.4
Basic:
Net income per share
$
0.43
$
0.31
$
1.44
$
3.01
Weighted average number of common shares
322.9
319.6
322.1
318.1
Diluted:
Net income per share
$
0.40
$
0.30
$
1.33
$
2.77
Numerator for diluted net income per share after assumed conversions
$
145.9
$
109.8
$
486.6
$
993.1
Adjusted weighted average number of common shares
364.4
362.8
364.9
359.0
Other Consolidated Financial Data:
Interest amortized to home and land/lot cost of sales
$
29.1
$
27.6
$
110.2
$
94.0
Depreciation and amortization
$
6.7
$
4.4
$
22.7
$
18.8
Interest incurred
$
47.3
$
34.5
$
172.8
$
124.1
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
September 30,
2013
2012
(In millions)
OPERATING ACTIVITIES
Net income
$
462.7
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization
22.7
Amortization of discounts and fees
39.7
Stock based compensation expense
19.0
Income tax benefit from employee stock awards
(6.7
)
Deferred income taxes
130.9
Gain on early retirement of debt, net
—
Gain on sale of marketable securities
(0.2
)
Inventory and land option charges
31.1
Changes in operating assets and liabilities:
Increase in construction in progress and finished homes
(815.3
)
developed, under development, and held for development
(1,235.6
)
Decrease (increase) in other assets
16.5
Decrease (increase) in income taxes receivable
14.4
Increase in mortgage loans held for sale
(49.8
)
Increase in accounts payable, accrued expenses and other liabilities
139.5
Net cash used in operating activities
(1,231.1
)
INVESTING ACTIVITIES
Purchases of property and equipment
(58.0
)
Purchases of marketable securities
(28.9
)
Proceeds from the sale or maturity of marketable securities
325.4
Increase in restricted cash
(28.5
)
Net principal increase of other mortgage loans and real estate owned
(2.5
)
Purchase of debt securities collateralized by residential real estate
(18.6
)
Principal payments received on debt securities collateralized by residential real estate
1.4
Payments related to acquisition of a business
(9.4
)
Net cash provided by (used in) investing activities
180.9
FINANCING ACTIVITIES
Proceeds from notes payable
1,307.9
Repayment of notes payable
(345.1
)
Proceeds from stock associated with certain employee benefit plans
29.7
Income tax benefit from employee stock awards
6.7
Cash dividends paid
(60.2
)
Net cash provided by financing activities
939.0
(DECREASE) INCREASE IN CASH AND CASH EQUIVALENTS
(111.2
)
Cash and cash equivalents at beginning of year
1,047.7
Cash and cash equivalents at end of year
$
936.5
D.R. HORTON, INC.
($’s in millions)
NET SALES ORDERS
Three Months Ended September 30,
Fiscal Year Ended September 30,
2013
2012
2013
2012
Homes
Value
Homes
Value
Homes
Value
Homes
Value
East
562
$
162.2
558
$
144.3
2,624
$
723.6
2,244
$
565.3
Midwest
279
100.1
330
99.5
1,480
503.2
1,301
386.2
Southeast
1,570
395.4
1,497
315.1
7,408
1,759.2
5,378
1,101.9
South Central
1,718
369.7
1,574
308.2
8,074
1,683.1
6,822
1,282.3
Southwest
227
52.9
371
77.6
1,381
288.9
1,715
327.7
West
804
347.8
946
309.9
4,153
1,609.0
3,588
1,139.9
5,160
$
1,428.1
5,276
$
1,254.6
25,120
$
6,567.0
21,048
$
4,803.3
HOMES CLOSED
Three Months Ended September 30,
Fiscal Year Ended September 30,
2013
2012
2013
2012
Homes
Value
Homes
Value
Homes
Value
Homes
Value
East
792
$
218.2
572
$
149.4
2,505
$
667.8
2,187
$
542.4
Midwest
421
141.4
396
121.4
1,449
471.3
1,164
339.3
Southeast
2,002
470.4
1,369
280.6
6,807
1,520.4
4,682
930.7
South Central
2,112
437.1
1,736
325.2
7,609
1,520.8
6,300
1,158.4
Southwest
426
86.7
464
88.5
1,605
327.7
1,442
269.4
West
1,113
448.2
1,038
323.2
4,180
1,516.8
3,115
978.2
6,866
$
1,802.0
5,575
$
1,288.3
24,155
$
6,024.8
18,890
$
4,218.4
SALES ORDER BACKLOG
East
Midwest
Southeast
South Central
Southwest
West
Source: D.R. Horton, Inc.
D.R. Horton, Inc.
Jessica Hansen, 817-390-8200
Vice President of Communications
"Safe Harbor" Statement under the Private Securities Litigation Reform Act of 1995: Statements in this press release regarding D.R. Horton's business which are not historical facts are "forward-looking statements" that involve risks and uncertainties. For a discussion of such risks and uncertainties, which could cause actual results to differ from those contained in the forward-looking statements, see "Risk Factors" in the Company's Annual Report or Form 10-K for the most recently ended fiscal year.
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