Company Contacts Investors: James Zeumer (248) 433-4597 email: jim.zeumer@pulte.com
Media: Mark Marymee (248) 433-4648 email: mark.marymee@pulte.com
PULTE HOMES ANNOUNCES RECORD FIRST QUARTER RESULTS
•
Earnings from Continuing Operations Increase 63% to $1.66 Per Diluted Share
•
First Quarter Income from Continuing Operations Increases 65% to $218.3 million
•
Domestic Net New Orders Climb 22% to $3.8 Billion; Unit Orders Up 12% to 12,067 Homes
•
Backlog Value Climbs 22% to Over $6.5 Billion; Unit Backlog Up 13% to 19,964 Homes
•
Company Raises Full Year Earnings Outlook
Bloomfield Hills, MI, April 27, 2005- Pulte Homes, Inc. (NYSE: PHM) announced today record financial results for its first quarter ended March 31, 2005. First quarter income from continuing operations was a record $218.3 million, an increase of 65% over prior year first quarter income of $132.2 million. First quarter earnings from continuing operations of $1.66 per diluted share represents an increase of 63% over prior year earnings from continuing operations of $1.02 per diluted share.
For the quarter, Pulte’s consolidated revenues were $2.55 billion, an increase of 26% over prior year revenues of $2.03 billion.
“We are extremely pleased with the performance of our operations in the first quarter, particularly in the areas of revenue growth, margin expansion and our 22% increase in the value of first quarter orders,” said Richard J. Dugas, Jr., President and CEO of Pulte Homes. “Given the strength of our first quarter results, combined with a record backlog and opportunities to further expand Pulte Homes’ share of the new home market, we are in an excellent position to deliver record earnings in 2005. We now expect full year 2005 earnings to be in the range of $9.35 to $9.85 per diluted share, up from prior guidance of $9.00 to $9.50 per diluted share.”
First quarter revenues from domestic homebuilding settlements increased 27% to $2.5 billion. Higher revenues for the period were the result of a 14% increase in closings to 8,019 homes, combined with an 11% increase in average selling price to $307,000. The higher average selling price resulted from favorable changes in the mix of houses closed combined with price increases realized during the quarter.
First quarter domestic homebuilding pretax income increased 62% to $359.6 million, compared with prior year first quarter pretax income of $222.5 million. Pretax income for the quarter benefited from an approximately 270 basis point improvement in gross margins from home sales to 24.6%. Margin expansion was driven by price increases realized during the quarter, a favorable product mix and initiatives to improve overall operating efficiencies. The Company was also successful in lowering domestic homebuilding selling, general & administrative expenses as a percent of home settlement revenues for the quarter by approximately 30 basis points to 10.3%.
Land sales and related gross profit in the first quarter were essentially unchanged at $24.2 million and $3.4 million, respectively, compared with $23.1 million and $3.5 million, respectively, in the prior year. Land sales are an important part of Pulte Homes’ overall land management strategy, but sales can fluctuate quarter-to-quarter depending upon the timing of individual land transactions.
Domestic net new home orders for the quarter were 12,067, up 12% over prior year first quarter orders of 10,751 homes. The Company’s ending backlog was valued at a record $6.5 billion (totaling 19,964 homes), compared with a value of $5.4 billion (17,664 homes) last year.
“Our results continue to benefit from Pulte Homes’ strategy of serving all major buyer segments including first time, first and second move up and particularly in active adult through our Del Webb brand,” said Mr. Dugas. “As the year progresses, we will continue to see the impact of efforts begun several years ago to expand the Del Webb brand into new cities, as we introduce these spectacular communities in such markets as Detroit, Denver, Jacksonville and Charlotte.”
The Company’s financial services operations reported first quarter pretax income of $10.1 million, compared with prior year pretax income of $10.1 million. Loan originations for the first quarter increased 24% to 7,592 mortgages.
For the first quarter, Pulte’s International operations reported pretax income of $1.3 million, compared with pretax income of $787 thousand last year. First quarter results for both years have been adjusted to reflect the previously announced sale of the Company’s Argentina operations in January 2005.
A conference call discussing Pulte’s first quarter results will be held Thursday, April 28, 2005 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 atwww.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. All forward-looking statements made are made as of the date hereof, and the risk that actual results will differ materially from expectations will increase with the passage of time. Pulte undertakes no duty to update any forward-looking statement whether as a result of new information, future events or changes in Pulte’s expectations.
About Pulte Homes
Pulte Homes, Inc., (NYSE: PHM), based in Bloomfield Hills, Mich., is a FORTUNE 200 company with operations in 47 markets and 27 states. In 2004, the company closed 38,612 domestic home sales and generated revenues of $11.7 billion. During its 55-year history, the company has constructed more than 408,000 homes. In 2004, J.D. Power and Associates named Pulte the inaugural recipient of its Platinum Award for Excellence in Customer Service among America’s leading homebuilders. J.D. Power ranked Pulte No. 1 in 14 markets, and among the top three in 23 of 25 markets surveyed. Under its Del Webb brand, Pulte is the nation’s leading builder of active adult communities for people age 55 and better. Its DiVosta operation is nationally recognized for a trademarked building system that has delivered more than 25,000 “Built Solid”® homes in Florida since 1960. Pulte Mortgage LLC is a nationwide lender and offers Pulte customers a wide variety of loan products and superior customer service.
Pulte Homes, Inc. Condensed Consolidated Results Of Operations (000’s omitted, except per share data) (Unaudited)
Three Months Ended
March 31,
2005
2004
CONSOLIDATED RESULTS:
Revenues:
Homebuilding
$
2,523,070
$
2,006,263
Financial Services
30,276
24,572
Corporate
1,248
897
Total Revenues
$
2,554,594
$
2,031,732
Pretax income (loss):
Homebuilding
360,842
223,312
Financial Services
10,084
10,089
Corporate
(22,756
)
(20,228
)
Income from continuing operations before income taxes
348,170
213,173
Income taxes
(129,850
)
(80,996
)
Income from continuing operations
$
218,320
$
132,177
Income(loss) from discontinued operations
(78
)
(548
)
Net income
$
218,242
$
131,629
EARNINGS PER SHARE - ASSUMING DILUTION:
Income from continuing operations
$
1.66
$
1.02
Income (loss) from discontinued operations
—
—
Net income
$
1.66
$
1.02
Shares used in per share calculations
131,377
128,829
1
Pulte Homes, Inc. Condensed Consolidated Balance Sheets ($000’s omitted)
March 31,
December 31,
March 31,
2005
2004
2004
(Unaudited)
(Unaudited)
ASSETS
Cash and equivalents
$
350,716
$
314,634
$
463,417
Unfunded settlements
74,352
118,471
70,598
House and land inventory
8,090,804
7,390,791
5,992,557
Land held for sale
226,044
230,743
240,627
Land, not owned, under option agreements
134,061
106,380
136,036
Residential mortgage loans available-for-sale
408,074
697,077
304,526
Investment in unconsolidated entities
309,321
258,868
110,187
Goodwill
307,693
307,693
307,693
Intangible assets
133,392
135,454
141,642
Other assets
866,650
846,786
586,844
$
10,901,107
$
10,406,897
$
8,354,127
LIABILITIES AND SHAREHOLDERS’ EQUITY
Liabilities:
Accounts payable, accrued and other liabilities
$
2,179,325
$
2,203,101
$
1,861,741
Collateralized short-term debt, recourse solely to applicable subsidiary assets
338,671
617,415
255,738
Income taxes
102,789
202,557
38,284
Senior notes and subordinated notes
3,510,455
2,861,550
2,573,633
Total Liabilities
6,131,240
5,884,623
4,729,396
Shareholders’ Equity
4,769,867
4,522,274
3,624,731
$
10,901,107
$
10,406,897
$
8,354,127
Pulte Homes, Inc. Segment Data ($000’s omitted) (Unaudited)
Three Months Ended
March 31,
2005
2004
HOMEBUILDING:
Pretax income:
Domestic
$
359,582
$
222,525
International
1,260
787
Total Homebuilding
$
360,842
$
223,312
Domestic Homebuilding:
Home sales (settlements)
$
2,462,109
$
1,942,541
Land sales
24,185
23,141
Domestic Homebuilding Revenue
2,486,294
1,965,682
Home cost of sales
(1,856,468
)
(1,516,324
)
Land cost of sales
(20,759
)
(19,612
)
Selling, general & administrative expense
(254,431
)
(205,601
)
Other income (expense), net
4,946
(1,620
)
Pretax income
$
359,582
$
222,525
International Homebuilding:
Home sales (settlements)
$
36,776
$
40,581
Cost of sales
(28,202
)
(32,898
)
Selling, general & administrative expense
(8,228
)
(6,699
)
Other income (expense), net
(302
)
(619
)
Minority Interest
(201
)
(397
)
Equity in income of joint venture operations
1,417
819
Pretax income
$
1,260
$
787
FINANCIAL SERVICES:
Pretax income
$
10,084
$
10,089
CORPORATE:
Pretax loss:
Net interest expense
$
(13,747
)
$
(11,635
)
Other Corporate expense, net
(9,009
)
(8,593
)
Total Corporate
$
(22,756
)
$
(20,228
)
2
Pulte Homes, Inc. Business Operating Data ($000’s omitted) (Unaudited)
Three Months Ended
March 31,
2005
2004
HOMEBUILDING SETTLEMENT REVENUES:
Domestic
$
2,462,109
$
1,942,541
International
36,776
40,581
Total settlement revenues
$
2,498,885
$
1,983,122
HOMEBUILDING UNIT SETTLEMENTS:
Domestic
8,019
7,039
International
1,313
1,547
Total settlement units
9,332
8,586
Domestic Homebuilding:
Unit settlements:
Northeast
538
519
Southeast
2,331
1,705
Midwest
901
773
Central
926
974
West
3,323
3,068
8,019
7,039
Average selling price
$
307
$
276
Unit net new orders:
Northeast
1,028
714
Southeast
3,717
2,769
Midwest
1,519
1,487
Central
1,620
1,576
West
4,183
4,205
12,067
10,751
Unit net new orders – dollars
$
3,833,000
$
3,153,000
Unit backlog:
Northeast
1,973
1,730
Southeast
6,691
4,790
Midwest
1,895
2,115
Central
1,771
1,758
West
7,634
7,271
19,964
17,664
Dollars in backlog
$
6,525,000
$
5,357,000
3
Pulte Homes, Inc. Business Operating Data, continued ($000’s omitted) (Unaudited)
Three Months Ended
March 31,
2005
2004
MORTGAGE ORIGINATIONS:
Origination volume
7,592
6,113
Origination principal
$
1,489,400
$
1,152,700
Capture rate percentage
88.7
%
86.1
%
Pulte Homes, Inc. Supplemental Information ($000’s omitted) (Unaudited)
Three Months Ended
March 31,
2005
2004
Interest expense:
Homebuilding (included in home cost of sales)
$
30,544
$
21,612
Corporate
14,995
12,532
Financial Services
2,801
1,498
Total interest expense
$
48,340
$
35,642
Depreciation & amortization
$
13,733
$
10,160
4
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