Stacey Dwyer, EVP 301 Commerce Street, Ste. 500, Fort Worth, Texas 76102 817-390-8200 April 19, 2005
D.R. HORTON, INC., AMERICA’S BUILDER, REPORTS A 56% INCREASE IN FISCAL YEAR 2005 SECOND QUARTER NET INCOME
Quarter Highlights
•
Net income increased 56% to $294.0 million
•
Diluted earnings per share increased 53% to $0.92 per share
•
Sales order backlog increased 33% to all-time record $6.2 billion (21,205 homes)
•
Net sales orders increased 23% to $4.1 billion (14,401 homes)
•
Consolidated revenue increased 23% to $2.9 billion
•
Gross margin on home sales revenue improved 250 basis points to 24.8%
•
Stockholders’ equity increased 32% to $4.5 billion
•
Homebuilding debt to total capitalization (net of cash) improved 80 basis points to 42.5%
FORT WORTH, TEXAS– D.R. Horton, Inc. (NYSE:DHI), the largest builder in the United States, Tuesday (April 19, 2005), reported that net income for the second fiscal quarter ended March 31, 2005 increased 56% to $294.0 million ($0.92 per diluted share), compared to $188.6 million ($0.60 per diluted share) for the quarter ended March 31, 2004. Second quarter consolidated revenue increased 23% to $2.9 billion from $2.3 billion in the year ago quarter. Homes closed for the second quarter increased 8% to 10,601 homes from 9,823 homes a year ago.
For the six months ended March 31, 2005, net income increased 43% to $535.0 million ($1.68 per diluted share), compared to $374.2 million ($1.18 per diluted share) for the same period of fiscal 2004. Consolidated revenue for the six months increased 19% to $5.4 billion, from $4.5 billion for the same period of fiscal 2004. Homes closed increased 6% to 20,281 homes from 19,065 homes for the same period of fiscal 2004.
The Company reported a record March 31, 2005 sales order backlog of $6.2 billion (21,205 homes), an increase of 33% from $4.6 billion (18,137 homes) a year ago. As previously reported, net sales orders for the second quarter ended March 31, 2005 increased 23% to $4.1 billion (14,401 homes), compared to $3.3 billion (13,480 homes) for the same quarter of fiscal 2004. Net sales orders for the first six months of fiscal 2005 increased 26% to $6.8 billion (24,302 homes), compared to $5.4 billion (21,714 homes) for the same period of fiscal 2004.
The Company expects diluted earnings per share for the quarter ended June 30, 2005 to be in the range of $0.98 to $1.02 (assuming approximately 319 million diluted shares). The Company is raising its guidance for fiscal year 2005 to be in the range of $3.95 to $4.00 (assuming approximately 318.5 million diluted shares). This range represents a 28% to 29% increase in earnings per share over the $3.09 reported in fiscal year 2004, and is based on projected consolidated revenue of more than $13.0 billion (approximately 50,000 homes closed).
D.R. Horton’s earnings release conference call will be Tuesday, April 19, 2005 at 11:00 a.m. EDT. The dial-in number is 800-374-9096, and the call will also be webcast fromwww.DRHORTON.com on the “Investor Relations” page.
Donald R. Horton, Chairman of the Board, said, “We are extremely pleased with the Company’s second quarter performance, where once again we grew our net income at a faster pace than our revenues. We are especially proud that we have achieved these results organically by continuing to increase our national market share. The Company’s continued sales momentum combined with our record $6.2 billion sales order backlog, provide a solid foundation for achieving our 28th consecutive year of record revenues and earnings in fiscal year 2005.”
D.R. Horton, Inc., America’s Builder, is the largest homebuilder in the United States, delivering more than 43,000 homes in its fiscal year ended September 30, 2004. Founded in 1978 in Fort Worth, Texas, D.R. Horton has expanded its presence to include 67 markets in 21 states in the Midwest, Mid-Atlantic, Southeast, Southwest and Western regions of the United States. The Company is engaged in the construction and sale of high quality homes with sales prices ranging from $80,000 to over $900,000. 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 relate to (i) the Company’s expectation of diluted earnings per share for the quarter ended June 30, 2005 to be in the range of $0.98 to $1.02 (ii) the Company’s expectation of diluted earnings per share for the 2005 fiscal year to be in the range of $3.95 to $4.00 based on projected consolidated revenue of more than $13.0 billion (approximately 50,000 homes closed), and (iii) the Company achieving its 28th consecutive year of record revenues and earnings in fiscal year 2005. 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: changes in general economic, real estate and business conditions; changes in interest rates and the availability of mortgage financing; warranty and product liability claims; our substantial debt; governmental regulations and environmental matters; competitive conditions within the industry; the availability of capital to the Company on favorable terms; the Company’s ability to integrate acquisitions and successfully effect the cost savings, operating efficiencies and revenue enhancements that are believed available and otherwise to successfully effect its other growth strategies. 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 most recent quarterly reports on Form 10-Q, which are filed with the Securities and Exchange Commission.
www.DRHORTON.com
1
D.R. HORTON, INC. CONSOLIDATED STATEMENTS OF INCOME (UNAUDITED)
Three months ended
Six months ended
March 31,
March 31,
2004
2005
2004
2005
(In millions, except per share amounts)
Homebuilding:
Revenues:
Home sales
$
2,250.5
$
2,706.8
$
4,385.1
$
5,155.8
Land/lot sales
42.7
120.1
71.7
145.2
2,293.2
2,826.9
4,456.8
5,301.0
Cost of sales:
Home sales
1,748.8
2,034.7
3,403.1
3,866.1
Land/lot sales
27.3
72.7
43.4
88.4
1,776.1
2,107.4
3,446.5
3,954.5
Gross profit:
Home sales
501.7
672.1
982.0
1,289.7
Land/lot sales
15.4
47.4
28.3
56.8
517.1
719.5
1,010.3
1,346.5
Selling, general and administrative expense
222.7
267.0
435.2
524.7
Interest expense
3.1
—
3.3
-
Other (income) expense
2.8
(5.9
)
0.2
(10.9
)
Operating income from Homebuilding
288.5
458.4
571.6
832.7
Financial Services:
Revenues
42.0
49.8
83.0
95.8
General and administrative expense
26.2
33.9
51.7
66.6
Interest expense
1.1
2.6
2.4
5.0
Other (income)
(3.4
)
(6.3
)
(7.9
)
(13.0
)
Operating income from Financial Services
18.1
19.6
36.8
37.2
Income before income taxes
306.6
478.0
608.4
869.9
Provision for income taxes
118.0
184.0
234.2
334.9
Net income
$
188.6
$
294.0
$
374.2
$
535.0
Basic:
Net income per share
$
0.61
$
0.94
$
1.21
$
1.72
Weighted average number of common shares*
310.4
312.0
310.1
311.8
Diluted:
Net income per share
$
0.60
$
0.92
$
1.18
$
1.68
Weighted average number of common shares*
316.1
318.0
315.9
317.6
Other Consolidated Financial Data
Interest amortized to home and land/lot cost of sales
$
54.9
$
56.0
$
107.7
$
98.9
Depreciation and amortization
$
10.4
$
12.9
$
21.9
$
26.8
Interest incurred
$
64.2
$
80.0
$
120.4
$
140.9
* adjusted for the four-for-three-stock split of March 2005
2
D.R. HORTON, INC. CONSOLIDATED BALANCE SHEET (UNAUDITED)
As of March 31, 2005
(In millions)
ASSETS
Homebuilding:
Cash and cash equivalents
$
526.1
Inventories:
Construction in progress and finished homes
3,584.5
Residential lots — developed and under development
4,121.2
Land held for development
6.3
Consolidated land inventory not owned
214.7
7,926.7
Property and equipment (net)
94.0
Earnest money deposits and other assets
690.6
Goodwill
578.9
9,816.3
Financial Services:
Cash and cash equivalents
46.7
Mortgage loans held for sale
648.3
Other assets
29.2
724.2
$
10,540.5
LIABILITIES
Homebuilding:
Accounts payable
$
718.2
Accrued and other liabilities
775.2
Liabilities associated with consolidated land inventory not owned
10.4
Notes payable
3,823.6
5,327.4
Financial Services:
Accounts payable and other liabilities
13.4
Notes payable
517.0
530.4
5,857.8
Minority interests
213.3
STOCKHOLDERS’ EQUITY
Common stock
3.1
Additional capital
1,613.1
Retained earnings
2,912.1
Treasury stock (at cost)
(58.9
)
4,469.4
$
10,540.5
D.R. HORTON, INC. ($’s in millions)
NET SALES ORDERS
Three Months Ended March 31,
Six Months Ended March 31,
2004
2005
2004
2005
Units
Dollars
Units
Dollars
Units
Dollars
Units
Dollars
Mid-Atlantic
1,034
$
277.3
1,263
$
346.2
1,749
$
444.0
2,300
$
623.1
Midwest
620
175.1
877
224.4
1,031
300.3
1,306
349.2
Southeast
1,758
365.0
1,974
498.0
2,931
616.6
3,733
908.6
Southwest
5,435
906.1
5,638
1,109.8
8,715
1,460.9
9,576
1,848.6
West
4,633
1,610.3
4,649
1,920.2
7,288
2,545.7
7,387
3,024.9
13,480
$
3,333.8
14,401
$
4,098.6
21,714
$
5,367.5
24,302
$
6,754.4
HOMES CLOSED
Three Months Ended March 31,
Six Months Ended March 31,
2004
2005
2004
2005
Units
Dollars
Units
Dollars
Units
Dollars
Units
Dollars
Mid-Atlantic
801
$
180.5
870
$
209.9
1,643
$
362.0
1,703
$
418.5
Midwest
443
119.2
436
113.0
887
238.5
855
224.5
Southeast
1,282
251.5
1,703
383.3
2,403
469.0
3,097
689.4
Southwest
4,432
729.5
4,549
807.7
8,373
1,370.9
8,653
1,512.7
West
2,865
969.8
3,043
1,192.9
5,759
1,944.7
5,973
2,310.7
9,823
$
2,250.5
10,601
$
2,706.8
19,065
$
4,385.1
20,281
$
5,155.8
SALES ORDER BACKLOG
As of March 31,
2004
2005
Units
Dollars
Units
Dollars
Mid-Atlantic
1,708
$
452.8
2,337
$
696.8
Midwest
1,125
340.7
1,312
394.4
Southeast
2,351
511.8
3,623
917.7
Southwest
7,018
1,210.9
7,555
1,531.2
West
5,935
2,119.5
6,378
2,626.9
18,137
$
4,635.7
21,205
$
6,167.0
3
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