Fiscal 2015 First Quarter Highlights - as compared to the
prior year quarter
- Net sales orders increased 40% in value
to $2.1 billion and 35% in homes to 7,370
- Homes closed increased 37% in value to
$2.2 billion and 29% in homes to 7,973
- Sales order backlog increased 29% in
value to $2.7 billion and 21% in homes to 9,285
- Pre-tax income increased 16% to $220.7
million
- Net income increased 16% to $142.5
million, or $0.39 per diluted share
D.R. Horton, Inc. (NYSE:DHI), America’s Builder, today reported
that net income for its first fiscal quarter ended
December 31, 2014 increased 16% to $142.5 million, or $0.39
per diluted share, from $123.2 million, or $0.36 per diluted share
in the same quarter of fiscal 2014. Homebuilding revenue for the
first quarter of fiscal 2015 increased 38% to $2.3 billion from
$1.6 billion in the same quarter of fiscal 2014. Homes closed in
the quarter increased 29% to 7,973, compared to 6,188 homes in the
prior year quarter.
Net sales orders for the first quarter ended December 31,
2014 increased 35% to 7,370 homes and 40% in value to $2.1 billion,
compared to 5,454 homes and $1.5 billion in the prior year quarter.
The Company’s cancellation rate (cancelled sales orders divided by
gross sales orders) for the first quarter of fiscal 2015 was 24%.
The Company’s sales order backlog of homes under contract at
December 31, 2014 increased 21% to 9,285 homes and 29% in
value to $2.7 billion, compared to 7,684 homes and $2.1 billion at
December 31, 2013.
The Company ended the quarter with $517.7 million of
homebuilding unrestricted cash and net homebuilding debt to total
capital of 35.4%. 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.
The Company has declared a quarterly cash dividend of $0.0625
per common share. The dividend is payable on February 17, 2015
to stockholders of record on February 6, 2015.
Donald R. Horton, Chairman of the Board, said, “Our fiscal 2015
is off to a great start, highlighted by $220.7 million of pre-tax
income, on $2.3 billion of revenues. Our position as the largest
and most geographically diverse homebuilder provides a strong
platform for us to compete for new home sales, evidenced by
year-over-year increases in the value of our net sales orders, home
sales revenue and sales order backlog of 40%, 37% and 29%,
respectively.
"Our weekly sales pace has accelerated in January, and we are
well-positioned to capture demand in the spring selling season with
our solid balance sheet and robust community count, finished lot
supply and inventory of homes available for sale. We also continue
to be pleased with the progress and performance of the rollouts of
our Express Homes and Emerald Homes brands.
"We remain intently focused on growing revenues and profits at a
double-digit pace, while generating improved returns and cash
flows."
The Company will host a conference call today (Monday, January
26th) at 10:00 a.m. Eastern time. The dial-in number is
877-407-8033, and the call will also be webcast from the Company's
website at investor.drhorton.com.
D.R. Horton, Inc., America’s Builder, has been the largest
homebuilder by volume in the United States for thirteen consecutive
years. Founded in 1978 in Fort Worth, Texas, D.R. Horton has
operations in 79 markets in 27 states across the United States and
closed 30,455 homes in the twelve-month period ended
December 31, 2014. The Company is engaged in the construction
and sale of high-quality homes through its diverse brand portfolio
that includes D.R. Horton, Express Homes and Emerald 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 our weekly sales pace has accelerated in January, and we are
well-positioned to capture demand in the spring selling season with
our solid balance sheet and robust community count, finished lot
supply and inventory of homes available for sale. The
forward-looking statements also include that we remain intently
focused on growing revenues and profits at a double-digit pace,
while generating improved returns and cash flows.
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 or general economic conditions;
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 impact of an inflationary, deflationary or
higher interest rate environment; 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 our growth strategies or
acquisitions successfully; our ability to realize the full amount
of our deferred income tax assets; the effects of the loss of key
personnel; the effects of negative publicity; 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, 2014
September 30, 2014 (In millions) ASSETS
Homebuilding: Cash and cash equivalents
$
517.7 $ 632.5 Restricted cash
9.6 10.0 Inventories:
Construction in progress and finished homes
3,719.7 3,541.3
Residential land and lots — developed and under development
3,944.1 3,800.0 Land held for development
304.3 332.8
Land held for sale
21.2 26.4
7,989.3
7,700.5 Deferred income taxes, net of valuation allowance of $31.0
million and $31.1 million at December 31, 2014 and September 30,
2014, respectively
552.7 565.0 Property and equipment, net
190.7 190.8 Other assets
448.5 441.1 Goodwill
94.8 94.8
9,803.3 9,634.7
Financial Services: Cash and cash equivalents
23.3
29.3 Mortgage loans held for sale
453.8 476.9 Other assets
58.3 61.6
535.4 567.8
Total assets
$ 10,338.7 $ 10,202.5
LIABILITIES Homebuilding: Accounts payable
$
400.4 $ 480.3 Accrued expenses and other liabilities
903.5 875.0 Notes payable
3,403.1 3,323.6
4,707.0 4,678.9
Financial
Services: Accounts payable and other liabilities
44.2
44.7 Mortgage repurchase facility
323.7 359.2
367.9 403.9 Total liabilities
5,074.9
5,082.8
EQUITY Common stock, $.01 par value,
1,000,000,000 shares authorized, 372,540,748 shares issued and
365,340,677 shares outstanding at December 31, 2014 and 371,786,765
shares issued and 364,586,694 shares outstanding at September 30,
2014
3.7 3.7 Additional paid-in capital
2,639.1
2,613.7 Retained earnings
2,750.2 2,630.5 Treasury stock,
7,200,071 shares at December 31, 2014 and September 30, 2014, at
cost
(134.3 ) (134.3 ) Accumulated other
comprehensive income
2.2 2.2 Total
stockholders’ equity
5,260.9 5,115.8 Noncontrolling
interests
2.9 3.9 Total equity
5,263.8
5,119.7 Total liabilities and equity
$
10,338.7 $ 10,202.5
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF
OPERATIONS
(UNAUDITED)
Three Months EndedDecember 31,
2014 2013 (In millions, except per share
data) Homebuilding: Revenues: Home sales
$
2,240.7 $ 1,630.8 Land/lot sales and other
12.3
4.8
2,253.0 1,635.6 Cost of
sales: Home sales
1,798.1 1,266.7 Land/lot sales and other
10.3 4.3 Inventory and land option charges
6.0
2.6
1,814.4 1,273.6 Gross profit: Home
sales
442.6 364.1 Land/lot sales and other
2.0 0.5
Inventory and land option charges
(6.0 ) (2.6 )
438.6 362.0 Selling, general and administrative expense
238.0 183.4 Other (income)
(5.5 ) (3.3 )
Homebuilding pre-tax income
206.1 181.9
Financial Services: Revenues, net of recourse and
reinsurance expense
49.6 35.0 General and administrative
expense
37.8 29.8 Interest and other (income)
(2.8
) (2.6 ) Financial services pre-tax income
14.6
7.8 Income before income taxes
220.7 189.7
Income tax expense
78.2 66.5 Net income
$ 142.5 $ 123.2
Basic: Net
income per share
$ 0.39 $ 0.38 Weighted
average number of common shares
364.9 323.1
Diluted: Net income per share
$ 0.39 $
0.36 Numerator for diluted income per share after assumed
conversions
$ 142.5 $ 130.0 Adjusted
weighted average number of common shares
368.1 364.4
Other Consolidated Financial Data: Interest charged
to cost of sales
$ 33.6 $ 25.3
Depreciation and amortization
$ 12.3 $ 7.8
Interest incurred
$ 40.4 $ 49.3
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF CASH
FLOWS
(UNAUDITED)
Three Months EndedDecember 31,
2014 2013 (In millions) OPERATING
ACTIVITIES Net income
$ 142.5 $ 123.2 Adjustments
to reconcile net income to net cash used in operating activities:
Depreciation and amortization
12.3 7.8 Amortization of
discounts and fees
1.3 10.3 Stock based compensation expense
11.4 5.4 Excess income tax benefit from employee stock
awards
(1.2 ) (0.9 ) Deferred income taxes
12.3 8.1 Inventory and land option charges
6.0 2.6
Changes in operating assets and liabilities: Increase in
construction in progress and finished homes
(179.5 )
(194.0 ) Increase in residential land and lots –
developed, under development, held for
development and held for sale
(110.8 ) (77.3 ) (Increase) decrease in other assets
(2.9 ) 25.9 Decrease in mortgage loans held for sale
23.1 95.3 Decrease in accounts payable, accrued expenses and
other liabilities
(43.5 ) (14.1 ) Net cash
used in operating activities
(129.0 ) (7.7 )
INVESTING ACTIVITIES Purchases of property and equipment
(11.3 ) (18.3 ) Decrease (increase) in restricted
cash
0.4 (3.3 ) Net principal increase of other mortgage
loans and real estate owned
(3.0 ) (1.2 ) Payments
related to acquisition of a business
— (34.5 )
Net cash used in investing activities
(13.9 )
(57.3 )
FINANCING ACTIVITIES Proceeds from notes payable
490.0 — Repayment of notes payable
(450.9 )
(55.8 ) Proceeds from stock associated with certain employee
benefit plans
4.6 3.3 Excess income tax benefit from
employee stock awards
1.2 0.9 Cash dividends paid
(22.8 ) — Net cash provided by (used
in) financing activities
22.1 (51.6 )
DECREASE IN CASH AND CASH EQUIVALENTS (120.8 )
(116.6 ) Cash and cash equivalents at beginning of period
661.8 977.4 Cash and cash equivalents
at end of period
$ 541.0 $ 860.8
D.R. HORTON, INC.
($’s in millions)
NET SALES ORDERS
Three Months Ended December 31, 2014
2013 Homes Value Homes
Value East
970 $ 260.1 676 $ 191.5
Midwest
340 123.3 223 86.0 Southeast
2,227
568.9 1,614 409.3 South Central
2,366 568.8
1,879 414.2 Southwest
310 69.5 230 49.7 West
1,157 517.6 832 352.4
7,370 $
2,108.2 5,454 $ 1,503.1
HOMES CLOSED
Three Months Ended December
31, 2014 2013 Homes
Value Homes Value East
1,088
$ 297.9 742 $ 190.1 Midwest
365 129.8
298 105.8 Southeast
2,380 615.6 1,846 447.3 South
Central
2,555 572.7 2,006 420.6 Southwest
330
75.4 339 70.6 West
1,255 549.3 957
396.4
7,973 $ 2,240.7 6,188 $ 1,630.8
SALES ORDER BACKLOG
As of December 31, 2014 2013
Homes Value Homes Value
East
1,333 $ 379.0 929 $ 258.9 Midwest
502 184.7 381 139.6 Southeast
2,748
744.0 2,578 665.7 South Central
3,169 787.8
2,570 589.4 Southwest
405 90.2 366 75.1 West
1,128 540.6 860 384.8
9,285 $
2,726.3 7,684 $ 2,113.5
D.R. Horton, Inc.Jessica Hansen, 817-390-8200Vice President of
CommunicationsInvestorRelations@drhorton.com
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