Exhibit 99.1
FOR IMMEDIATE RELEASE | Investor Relations | |
Contact: James Zeumer | ||
Vice President | ||
(248) 433-4597 | ||
email: jim.zeumer@pulte.com | ||
Media Relations | ||
Contact: Valerie Dolenga | ||
Corporate Communications | ||
(248) 433-4633 | ||
email: valerie.dolenga@pulte.com |
PULTE HOMES REPORTS RECORD FOURTH QUARTER FINANCIAL RESULTS
• | Fourth Quarter Income From Continuing Operations Increases 44% |
• | Earnings Per Diluted Share from Continuing Operations Increase 40% to $1.95 (split adjusted), as Net Income from Continuing Operations Climbs to $248 Million |
• | Fourth Quarter Net New Orders Increase 31% to 8,465 Homes |
• | Quarter-end Backlog Up 32% to 13,952 Homes, Valued at $4.1 Billion |
• | Company Raises Guidance for 2004 Earnings from Continuing Operations to a Range of $6.00 to $6.25 (split adjusted) Per Diluted Share |
Bloomfield Hills, MI, January 28, 2004- Pulte Homes, Inc. (NYSE: PHM) today announced record financial results for its fourth quarter and year ended December 31, 2003. For the quarter, net income from continuing operations increased 44% to a record $248.0 million, as compared to $172.0 million in 2002. Fourth quarter earnings per diluted share from continuing operations increased 40% to $1.95 (split adjusted), as compared to prior year earnings per diluted share of $1.39 (split adjusted). All “per share” results have been adjusted for the Company’s two-for-one stock split that was announced on December 11, 2003, and effective as of January 2, 2004.
Consolidated fourth quarter revenues for the Company increased 23% to a record $3.1 billion. For the year, Pulte reported record consolidated revenues of $9.0 billion, representing a 21% increase over the prior year and the first time the Company’s revenues have topped $9 billion.
“The strength of our fourth quarter and full year results reflects the success of Pulte’s unique segmentation strategy that emphasizes serving all major buyer segments. In addition, we continue to focus on driving more of every revenue dollar to the bottom line,” said Richard J. Dugas, Jr., President and CEO of Pulte Homes. “Our success in these areas has also resulted in the Company achieving targeted improvements in returns on equity and invested capital.”
“Given our record backlog, accelerating order rates and improving margins, we are raising our earnings guidance for 2004,” added Mr. Dugas. “Based on current market conditions, we project 2004 earnings from continuing operations to be in the range of $6.00 to $6.25 per diluted share, or a growth rate of 22% to 27% over 2003.”
Fourth Quarter Results
Revenues from domestic homebuilding settlements for the fourth quarter increased 24% to a record $2.9 billion. Higher revenues for the period were the result of a 6% increase in average selling price to $261,000, combined with a 17% increase in total home deliveries to a fourth quarter record 11,159 houses. The higher average selling price for the period reflects a combination of price increases and changes in the mix of homes delivered.
Fourth quarter domestic homebuilding pretax income increased 43% to $399.7 million, as compared to prior year pretax income of $278.8 million. Pretax income for the period reflects a 150 basis point increase in gross margins from home sales resulting from price increases realized during the quarter, a favorable product mix and an improvement in overall operating efficiencies. Selling, General & Administrative expenses as a percent of home settlement revenues increased 20 basis points to 8.6%.
Land sales during the quarter generated $115.3 million in revenues and $40.8 million in gross profits, as compared to $89.8 million and $27.4 million, respectively, in 2002. Land sales are an important component of the Company’s domestic homebuilding operations, but can fluctuate quarter-to-quarter depending upon the timing of individual land transactions.
Domestic net new home orders for the quarter were 8,465, up 31% from the prior year fourth quarter orders of 6,458 homes. Pulte’s ending backlog for its domestic operations was valued at $4.1 billion (13,952 homes), as compared to $2.9 billion (10,605 homes) in 2002.
Fourth quarter pretax income for the Company’s financial services operations totaled $17.5 million, down slightly from prior year pretax income of $19.1 million as gains associated with increased loan origination volumes were partially offset by a less favorable interest rate environment. Higher homebuilding volumes, combined with an expanded capture rate of 83%, helped to drive loan production for the period to 9,083 loans.
For the fourth quarter, Pulte’s International operations reported pretax income of $3.1 million, as compared to $3.3 million in 2002. Improved fourth quarter performance in the Company’s Mexico and Puerto Rico operations was offset by reduced profitability in Argentina. As previously announced, the Company is in the process of evaluating various long-term strategic alternatives with regard to its International operations.
Full Year Results
For the year ended December 31, 2003, Pulte Homes’ net income from continuing operations increased 39% to $617.3 million, as compared to prior year net income of $444.6 million. Diluted earnings per share from continuing operations for 2003 were $4.91 per share (split adjusted), an increase of 36% over prior year earnings per diluted share of $3.60. Consolidated revenues for the period were $9.0 billion, up from $7.5 billion in 2002.
Revenues from domestic homebuilding settlements for 2003 were $8.5 billion, up 21% over the prior year. Higher revenues for the period resulted from a 7% increase in average selling price to $259,000, combined with a 13% increase in the number of homes closed which totaled a record 32,693 homes. The increase in average selling price for the period reflects a combination of price increases and a favorable change in the mix of product closed during the period.
Domestic homebuilding pretax income for the year increased 39% to a record $998.8 million, as compared to prior year pretax income of $719.0 million. Gross margins from home sales for the period increased 120 basis points to 20.6%. This improvement was partially offset by a 20 basis point increase in SG&A expense as a percent of home settlement revenues. Land sales for the year generated $65.9 million in gross margin, as compared to $53.0 million in 2002.
For 2003, Pulte’s financial services operations reported pretax income of $68.8 million, up 3% from prior year pretax income of $66.7 million. The improvement was driven by an increase in loan originations and a higher capture rate of approximately 83%, as compared to 78% in 2002.
Pulte’s International operations reported pretax income for 2003 was $3.3 million, as compared to pretax income of $5.1 million in 2002. Gains in the Company’s Puerto Rico operations were offset by weaker results in Mexico and Argentina.
A conference call discussing Pulte Homes’ fourth quarter results will be held Thursday, January 29, 2004, at 8:30 a.m. Eastern Time, and web cast live via Pulte.com. Interested investors can access the call via the Company’s home page at www.pulte.com.
Certain statements in this release constitute “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among other things, (1) general economic and business conditions; (2) interest rate changes and the availability of mortgage financing; (3) the relative stability of debt and equity markets; (4) competition; (5) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (6) the availability and cost of insurance covering risks associated with our business; (7) shortages and the cost of labor; (8) weather related slowdowns; (9) slow growth initiatives and/or local building moratoria; (10) governmental regulation, including the interpretation of tax, labor and environmental laws; (11) changes in consumer confidence and preferences; (12) required accounting changes; (13) terrorist acts and other acts of war; and (14) other factors over which the Company has little or no control.
About Pulte Homes
Pulte Homes, Inc., (www.pulte.com) based in Bloomfield Hills, Michigan, has operations in 44 markets across the United States. Under its Del Webb (www.delwebb.com) brand, the Company is also the nation’s leading builder of active adult communities for people age 55 and older. Over its history, the Company has constructed more than 370,000 homes and has been named Builder of the Year for 2002 byProfessional Buildermagazine. Pulte Mortgage LLC is a nationwide lender committed to meeting the financing needs of Pulte Homes’ customers by offering a wide variety of loan products and superior customer service.
/Web site:http://www.pulte.com/
Pulte Homes, Inc.
Condensed Consolidated Results
Of Operations
(000’s omitted, except per share data)
(Unaudited)
Three Months Ended | Year Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2003 | 2002 | 2003 | 2002 | ||||||||||||||
CONSOLIDATED RESULTS: | |||||||||||||||||
Revenues: | |||||||||||||||||
Homebuilding | $ | 3,107,284 | $ | 2,515,397 | $ | 8,929,798 | $ | 7,363,989 | |||||||||
Financial Services | 30,626 | 31,926 | 115,847 | 106,628 | |||||||||||||
Corporate | 438 | 686 | 3,281 | 1,202 | |||||||||||||
Total Revenues | $ | 3,138,348 | $ | 2,548,009 | $ | 9,048,926 | $ | 7,471,819 | |||||||||
Pre-tax income (loss): | |||||||||||||||||
Homebuilding | $ | 402,843 | $ | 282,031 | $ | 1,002,161 | $ | 724,067 | |||||||||
Financial Services | 17,491 | 19,139 | 68,846 | 66,723 | |||||||||||||
Corporate | (20,335 | ) | (19,198 | ) | (75,351 | ) | (61,968 | ) | |||||||||
Income from continuing operations before income taxes | 399,999 | 281,972 | 995,656 | 728,822 | |||||||||||||
Income taxes | (152,013 | ) | (109,928 | ) | (378,334 | ) | (284,221 | ) | |||||||||
Income from continuing operations | 247,986 | 172,044 | 617,322 | 444,601 | |||||||||||||
Income (Loss) from discontinued operations | (92 | ) | (160 | ) | 7,312 | 9,044 | |||||||||||
Net income | $ | 247,894 | $ | 171,884 | $ | 624,634 | $ | 453,645 | |||||||||
EARNINGS PER SHARE — ASSUMING DILUTION: | |||||||||||||||||
Income from continuing operations | $ | 1.95 | $ | 1.39 | $ | 4.91 | $ | 3.60 | |||||||||
Income (Loss) from discontinued operations | — | — | .06 | .07 | |||||||||||||
Net income | $ | 1.94 | $ | 1.39 | $ | 4.97 | $ | 3.67 | |||||||||
Shares used in per share calculations | 127,464 | 123,648 | 125,730 | 123,492 | |||||||||||||
Certain 2002 classifications have been changed to conform with the 2003 presentation. In addition, all share and per share amounts have been restated to retroactively reflect the stock split announced December 11, 2003 and effected January 2, 2004.
Pulte Homes, Inc.
Condensed Consolidated Balance Sheets
($000’s omitted)
(Unaudited)
December 31, 2003 | December 31, 2002 | |||||||||
ASSETS | ||||||||||
Cash and equivalents | $ | 404,092 | $ | 613,168 | ||||||
Unfunded settlements | 122,300 | 60,641 | ||||||||
House and land inventories | 5,528,410 | 4,293,597 | ||||||||
Land, not owned, under option agreements | 73,256 | — | ||||||||
Residential mortgage loans available-for-sale | 541,126 | 600,339 | ||||||||
Goodwill | 307,693 | 307,693 | ||||||||
Intangible assets | 143,704 | 151,954 | ||||||||
Other assets | 952,917 | 861,063 | ||||||||
$ | 8,073,498 | $ | 6,888,455 | |||||||
LIABILITIES AND SHAREHOLDERS’ EQUITY | ||||||||||
Liabilities: | ||||||||||
Accounts payable, accrued and other liabilities | $ | 1,915,725 | $ | 1,565,131 | ||||||
Collateralized short-term debt, recourse solely to applicable subsidiary assets | 479,287 | 559,621 | ||||||||
Income taxes | 79,391 | 90,009 | ||||||||
Senior notes and subordinated debentures | 2,150,972 | 1,913,268 | ||||||||
Total Liabilities | 4,625,375 | 4,128,029 | ||||||||
Shareholders’ Equity | 3,448,123 | 2,760,426 | ||||||||
$ | 8,073,498 | $ | 6,888,455 | |||||||
Certain 2002 classifications have been changed to conform with the 2003 presentation.
Pulte Homes, Inc.
Segment Data
($000’s omitted)
Three Months Ended | |||||||||||
December 31, | |||||||||||
2003 | 2002 | ||||||||||
HOMEBUILDING: | |||||||||||
Pre-tax income: | |||||||||||
Domestic | $ | 399,706 | $ | 278,755 | |||||||
International | 3,137 | 3,276 | |||||||||
Total Homebuilding | $ | 402,843 | $ | 282,031 | |||||||
Domestic Homebuilding: | |||||||||||
Home sales (settlements) | $ | 2,916,448 | $ | 2,353,696 | |||||||
Land sales | 115,332 | 89,801 | |||||||||
Domestic Homebuilding | |||||||||||
Revenue | 3,031,780 | 2,443,497 | |||||||||
Home cost of sales | (2,306,319 | ) | (1,896,768 | ) | |||||||
Land cost of sales | (74,570 | ) | (62,444 | ) | |||||||
Selling, general & administrative expense | (252,185 | ) | (197,099 | ) | |||||||
Other income (expense), net | 1,000 | (8,431 | ) | ||||||||
Pre-tax income | $ | 399,706 | $ | 278,755 | |||||||
International Homebuilding: | |||||||||||
Home sales (settlements) | $ | 75,504 | $ | 71,900 | |||||||
Cost of sales | (61,410 | ) | (57,636 | ) | |||||||
Selling, general & administrative expense | (10,751 | ) | (10,243 | ) | |||||||
Other income (expense), net | 169 | (161 | ) | ||||||||
Minority Interest | (1,427 | ) | (1,178 | ) | |||||||
Equity in income of joint venture operations | 1,052 | 594 | |||||||||
Pre-tax income | $ | 3,137 | $ | 3,276 | |||||||
FINANCIAL SERVICES: | |||||||||||
Pre-tax income | $ | 17,491 | $ | 19,139 | |||||||
CORPORATE: | |||||||||||
Pre-tax loss: | |||||||||||
Net interest expense | $ | (10,653 | ) | $ | (9,731 | ) | |||||
Other Corporate expense, net | (9,682 | ) | (9,467 | ) | |||||||
Total Corporate | $ | (20,335 | ) | $ | (19,198 | ) | |||||
Certain 2002 classifications have been changed to conform with the 2003 presentation. Domestic Homebuilding interest expense, which represents the amortization of capitalized interest, of $28.0 million and $15.6 million for the three months ended December 31, 2003 and 2002, respectively, has been reclassified to home cost of sales. The reclassifications had no impact on reported net earnings.
Pulte Homes, Inc.
Segment Data
($000’s omitted)
Year Ended | |||||||||||
December 31, | |||||||||||
2003 | 2002 | ||||||||||
HOMEBUILDING: | |||||||||||
Pre-tax income: | |||||||||||
Domestic | $ | 998,822 | $ | 719,010 | |||||||
International | 3,339 | 5,057 | |||||||||
Total Homebuilding | $ | 1,002,161 | $ | 724,067 | |||||||
Domestic Homebuilding: | |||||||||||
Home sales (settlements) | $ | 8,482,341 | $ | 6,991,614 | |||||||
Land sales | 219,320 | 176,301 | |||||||||
Domestic Homebuilding Revenue | 8,701,661 | 7,167,915 | |||||||||
Home cost of sales | (6,731,834 | ) | (5,638,162 | ) | |||||||
Land cost of sales | (153,415 | ) | (123,306 | ) | |||||||
Selling, general & administrative expense | (820,951 | ) | (664,469 | ) | |||||||
Other income (expense), net | 3,361 | (22,968 | ) | ||||||||
Pre-tax income | $ | 998,822 | $ | 719,010 | |||||||
International Homebuilding: | |||||||||||
Home sales (settlements) | $ | 228,137 | $ | 196,074 | |||||||
Cost of sales | (183,271 | ) | (157,056 | ) | |||||||
Selling, general & administrative expense | (42,126 | ) | (35,029 | ) | |||||||
Other expense, net | (1,485 | ) | (1,610 | ) | |||||||
Minority Interest | (1,382 | ) | (1,801 | ) | |||||||
Equity in income of joint venture operations | 3,466 | 4,479 | |||||||||
Pre-tax income | $ | 3,339 | $ | 5,057 | |||||||
FINANCIAL SERVICES: | |||||||||||
Pre-tax income | $ | 68,846 | $ | 66,723 | |||||||
CORPORATE: | |||||||||||
Pre-tax loss: | |||||||||||
Net interest expense | $ | (39,364 | ) | $ | (38,214 | ) | |||||
Other Corporate expense, net | (35,987 | ) | (23,754 | ) | |||||||
Total Corporate | $ | (75,351 | ) | $ | (61,968 | ) | |||||
Certain 2002 classifications have been changed to conform with the 2003 presentation. Domestic Homebuilding interest expense, which represents the amortization of capitalized interest, of $78.7 million and $48.7 million for the year ended December 31, 2003 and 2002, respectively, has been reclassified to home cost of sales. The reclassifications had no impact on reported net earnings.
Pulte Homes, Inc.
Business Operating Data
($000’s omitted)
Three Months Ended | Year Ended | |||||||||||||||||
December 31, | December 31, | |||||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||||
HOMEBUILDING UNIT SETTLEMENTS: | ||||||||||||||||||
Domestic | 11,159 | 9,528 | 32,693 | 28,903 | ||||||||||||||
International | 2,540 | 2,122 | 7,120 | 6,525 | ||||||||||||||
Total Pulte settlement units | 13,699 | 11,650 | 39,813 | 35,428 | ||||||||||||||
HOMEBUILDING SETTLEMENT REVENUES: | ||||||||||||||||||
Domestic | $ | 2,916,448 | $ | 2,353,696 | $ | 8,482,341 | $ | 6,991,614 | ||||||||||
International | 75,504 | 71,900 | 228,137 | 196,074 | ||||||||||||||
Total Pulte settlement revenues | $ | 2,991,952 | $ | 2,425,596 | $ | 8,710,478 | $ | 7,187,688 | ||||||||||
Domestic Homebuilding Unit settlements: | ||||||||||||||||||
Northeast | 1,087 | 927 | 2,692 | 2,440 | ||||||||||||||
Southeast | 2,621 | 2,585 | 8,234 | 8,271 | ||||||||||||||
Midwest | 1,631 | 1,511 | 4,936 | 4,458 | ||||||||||||||
Central | 2,024 | 1,734 | 5,283 | 4,588 | ||||||||||||||
West | 3,796 | 2,771 | 11,548 | 9,146 | ||||||||||||||
11,159 | 9,528 | 32,693 | 28,903 | |||||||||||||||
Average selling price | $ | 261 | $ | 247 | $ | 259 | $ | 242 | ||||||||||
Unit net new orders*: | ||||||||||||||||||
Northeast | 687 | 604 | 3,098 | 2,738 | ||||||||||||||
Southeast | 1,994 | 1,831 | 9,021 | 8,651 | ||||||||||||||
Midwest | 1,077 | 987 | 4,736 | 4,684 | ||||||||||||||
Central | 1,231 | 824 | 5,125 | 4,590 | ||||||||||||||
West | 3,476 | 2,212 | 13,009 | 10,167 | ||||||||||||||
8,465 | 6,458 | 34,989 | 30,830 | |||||||||||||||
Unit backlog: | ||||||||||||||||||
Northeast | 1,535 | 1,129 | ||||||||||||||||
Southeast | 3,726 | 2,939 | ||||||||||||||||
Midwest | 1,401 | 1,601 | ||||||||||||||||
Central | 1,156 | 905 | ||||||||||||||||
West | 6,134 | 4,031 | ||||||||||||||||
13,952 | 10,605 | |||||||||||||||||
Dollars in backlog | $ | 4,147,000 | $ | 2,857,000 | ||||||||||||||
* | Unit net new orders for the year ended December 31, 2003 do not include 1,051 units of acquired backlog. |
Pulte Homes, Inc.
Business Operating Data, continued
($000’s omitted)
Three Months Ended | Year Ended | ||||||||||||||||
December 31, | December 31, | ||||||||||||||||
2003 | 2002 | 2003 | 2002 | ||||||||||||||
MORTGAGE | |||||||||||||||||
ORIGINATIONS: | |||||||||||||||||
Origination volume | 9,083 | 8,114 | 28,655 | 23,074 | |||||||||||||
Origination principal | $ | 1,621,100 | $ | 1,349,700 | $ | 4,989,500 | $ | 3,771,000 | |||||||||
Pulte Homes, Inc.
Supplemental Information
($000’s omitted)
Three Months Ended | Year Ended | |||||||||||||||
December 31, | December 31, | |||||||||||||||
2003 | 2002 | 2003 | 2002 | |||||||||||||
Corporate interest expense | $ | 11,091 | $ | 10,417 | $ | 42,645 | $ | 39,416 | ||||||||
Homebuilding interest expense (included in home cost of sales) | 27,999 | 15,553 | 78,708 | 48,697 | ||||||||||||
Financial Services interest expense | 1,963 | 2,049 | 7,386 | 6,753 | ||||||||||||
Total interest expense | $ | 41,053 | $ | 28,019 | $ | 128,739 | $ | 94,866 | ||||||||
Depreciation & amortization | $ | 10,791 | $ | 8,216 | $ | 40,160 | $ | 39,251 | ||||||||