Sam Fuller, CFO; Stacey Dwyer, EVP
1901 Ascension Blvd., Suite 100, Arlington, TX 76006
817-856-8200
July 16, 2003
D.R. HORTON, INC. REPORTS A 47% INCREASE IN THIRD QUARTER NET INCOME AND A
RECORD $4.0 BILLION BACKLOG AT JUNE 30, 2003
Quarter Highlights
o Earnings per diluted share increased 48% to $0.99
o Net income increased 47% to $155.6 million
o Sales backlog increased 37% to a record $4.0 billion (16,901 homes)
o Net sales orders increased 29% to $2.6 billion (10,811 homes)
o Consolidated revenue increased 22% to $2.2 billion
o Homes closed increased 14% to 9,005 homes
o Homebuilding debt to total capitalization (net of cash) improved 1,000 basis
points to 45.9% from 55.9%
ARLINGTON, TEXAS - D.R. Horton, Inc.(NYSE:DHI) Wednesday (July 16, 2003),
reported that net income for the quarter ended June 30, 2003 increased 47% to
$155.6 million ($0.99 per diluted share), from $105.9 million ($0.67 per diluted
share) for the same period in fiscal 2002. Third quarter consolidated revenue
increased 22% to $2.2 billion, from $1.8 billion in fiscal 2002. Homes closed
increased 14% to 9,005 homes from 7,877 in the year ago quarter.
For the nine months ended June 30, 2003, net income increased 47% to $395.2
million ($2.62 per diluted share), compared to $268.3 million ($1.94 per diluted
share) for the same period of fiscal 2002. Consolidated revenue for the nine
months increased 28% to $5.9 billion, from $4.6 billion for the same period of
fiscal 2002. Homebuilding revenue for the nine months increased 28% to $5.7
billion (24,407 homes closed), compared to $4.5 billion (20,207 homes closed)
for the same period of fiscal 2002.
As previously reported, net sales orders for the third quarter established
an all-time quarterly record of $2.6 billion (10,811 homes), an increase of 29%
compared to $2.0 billion (9,065 homes) for the same quarter of fiscal 2002. Net
sales orders for the first nine months of fiscal 2003 increased 38% to a record
$6.8 billion (28,611 homes), compared to $4.9 billion (22,826 homes) for the
same period of fiscal 2002. The Company's backlog of homes under contract at
June 30, 2003 totaled a record $4.0 billion (16,901 homes), up 37% from $2.9
billion (13,586 homes) at June 30, 2002.
The Company reiterates earnings per share guidance for the fiscal year year
ended September 30, 2003 of approximately $3.85 to $3.90, and is issuing
preliminary guidance for the fiscal year ended September 30, 2004 of
approximately $4.25 to $4.30.
The Company will host a conference call Thursday, July 17th at 10:00 a.m.
EDT. The dial-in number is 800-374-9096. The call will also be webcast from
www.drhorton.com on the "Investor Relations" page.
Donald R. Horton, Chairman of the Board, said, "It has been another
exciting quarter for the Company. In addition to record home sales orders,
backlog, revenues, and profits, we saw significant improvement in our balance
sheet structure as our homebuilding debt to total capitalization (net of cash)
improved by 1,000 basis points. The Company's continued sales momentum combined
with our record $4.0 billion backlog, ensure that fiscal 2003 will be our 26th
consecutive year of growth and profitability, and position us for another record
year in fiscal year 2004."
Founded in 1978, D.R. Horton, Inc. is engaged in the construction and sale
of high quality homes designed principally for the entry-level and first time
move-up markets. D.R. Horton currently builds and sells homes under the D.R.
Horton, Arappco, Cambridge, Continental, Dietz-Crane, Dobson, Emerald, Melody,
Milburn, Schuler, SGS Communities, Stafford, Torrey, Trimark, and Western
Pacific names in 20 states and 44 markets, with a geographic presence in the
Midwest, Mid-Atlantic, Southeast, Southwest and Western regions of the United
States. The Company 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 our earnings per share guidance for 2003
and 2004, continued sales momentum and our assurance of another consecutive year
of growth and profitability in 2003, and our expectations as to our position for
2004 based on our record earnings and record backlog position. 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; governmental
regulations and environmental matters; the Company's substantial leverage;
competitive conditions within the industry; the availability of capital to the
Company on favorable terms; the Company's ability to integrate its 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 the most recent Form 10-Q, both of which were filed with the
Securities and Exchange Commission.
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three months ended Nine months ended
June 30, June 30,
------------------------- ------------------------
2002 2003 2002 2003
------------ ----------- ----------- -----------
(In millions, except per share amounts)
HOMEBUILDING:
Revenues
Home sales....................................... $ 1,750.2 $ 2,108.9 $ 4,410.3 $ 5,553.2
Land/lot sales .................................. 29.4 57.9 80.5 189.0
--------- --------- --------- ---------
1,779.6 2,166.8 4,490.8 5,742.2
--------- --------- --------- ---------
Cost of sales
Home sales....................................... 1,416.1 1,676.3 3,573.8 4,429.6
Land/lot sales .................................. 25.9 50.5 70.1 162.1
--------- --------- --------- ---------
1,442.0 1,726.8 3,643.9 4,591.7
--------- --------- --------- ---------
Gross profit
Home sales....................................... 334.1 432.6 836.5 1,123.6
Land/lot sales .................................. 3.5 7.4 10.4 26.9
--------- --------- --------- ---------
337.6 440.0 846.9 1,150.5
--------- --------- --------- ---------
Selling, general and administrative expense ....... 177.0 208.0 444.9 574.4
Interest expense................................... 1.5 1.7 5.2 2.1
Other expense...................................... 3.8 3.4 4.0 3.1
--------- --------- --------- ---------
Operating income from homebuilding ................ 155.3 226.9 392.8 570.9
--------- --------- --------- ---------
Financial services:
Revenues .......................................... 28.9 45.6 77.7 123.6
Selling, general and administrative expense ....... 18.2 25.3 48.3 69.6
Interest expense................................... 1.2 1.7 3.5 5.3
Other (income)..................................... (4.7) (5.4) (10.6) (16.4)
--------- --------- --------- ---------
Operating income from financial services .......... 14.2 24.0 36.5 65.1
--------- --------- --------- ---------
Income before income taxes........................... 169.5 250.9 429.3 636.0
Provision for income taxes........................... 63.6 95.3 161.0 240.8
--------- --------- --------- ---------
Net Income........................................... $ 105.9 $ 155.6 $ 268.3 $ 395.2
Amounts per share - basic:
Net income ........................................ $ 0.72 $ 1.07 $ 2.06 $ 2.70
========= ========= ========= ========
Weighted average number of common shares ............ 146.3 146.0 130.2 146.3
========= ========= ========= ========
Amounts per share - diluted:
Net income ....................................... $ 0.67 $ 0.99 $ 1.94 $ 2.62
========= ========= ========= ========
Weighted average number of common shares ........... 159.0 157.5 139.3 151.4
========= ========= ========= ========
Other Consolidated Financial Data
Interest amortized to home and land/lot cost of sales $ 37.9 $ 55.5 $ 89.6 $ 144.7
========= ========= ========= ========
Depreciation and amortization ..................... $ 7.6 $ 11.3 $ 18.6 $ 30.0
========= ========= ========= ========
Interest incurred.................................. $ 59.5 $ 64.1 $ 145.1 $ 184.6
========= ========= ========= ========
D.R. HORTON, INC.
CONSOLIDATED BALANCE SHEET
(UNAUDITED)
June 30, 2003
---------------------------
(In millions)
ASSETS
Homebuilding:
Cash and cash equivalents ................................ $ 264.2
Inventories .............................................. 4,997.3
Property and equipment (net) ............................. 75.7
Other assets ............................................. 418.6
Excess of cost over net assets acquired (net) ............ 581.2
--------
6,337.0
--------
--------
Financial services:
Cash and cash equivalents ................................ 32.1
Mortgage loans held for sale ............................. 525.5
Other assets ............................................. 21.5
--------
579.1
--------
$ 6,916.1
========
LIABILITIES
Homebuilding:
Accounts payable and other liabilities ................... $ 918.1
Notes payable ............................................ 2,667.0
--------
3,585.1
--------
Financial services:
Accounts payable and other liabilities ................... 12.2
Notes payable ............................................ 414.0
--------
426.2
--------
4,011.3
--------
Minority interests ....................................... 69.5
--------
STOCKHOLDERS' EQUITY
Common stock ............................................. 1.6
Additional capital ....................................... 1,576.7
Unearned compensation .................................... (2.7)
Retained earnings ........................................ 1,289.2
Treasury stock ........................................... (29.5)
--------
2,835.3
--------
$ 6,916.1
========
D.R. HORTON, INC.
($'s in millions)
NET SALES ORDERS
Three Months Ended June 30, Nine Months Ended June 30,
--------------------------------------- -----------------------------------------
2002 2003 2002 2003
------ -------- ------ -------
Units $'s Units $'s Units $'s Units $'s
------- --------- ------- -------- ------- --------- ------- ---------
Mid-Atlantic 960 $ 201.3 952 $ 216.1 2,471 $ 512.0 2,666 $ 577.1
Midwest .... 543 126.8 503 138.0 1,394 341.1 1,454 385.6
Southeast .. 976 161.9 1,213 237.7 2,680 438.6 3,314 623.0
Southwest .. 3,520 590.5 4,317 715.5 9,537 1,583.7 11,561 1,924.6
West ....... 3,066 954.1 3,826 1,311.1 6,744 2,014.1 9,616 3,246.0
------ -------- ------ -------- ------ -------- ------ --------
9,065 $ 2,034.6 10,811 $ 2,618.4 22,826 $ 4,889.5 28,611 $ 6,756.3
====== ======== ====== ========= ======= ======== ======= ========
HOMES CLOSED
Three Months Ended June 30, Nine Months Ended June 30,
------------------------------------------ --------------------------------------
2002 2003 2002 2003
-------- ------ -------- -------
Units $'s Units $'s Units $'s Units $'s
-------- --------- ------ --------- -------- -------- ------- ----------
Mid-Atlantic 788 $ 167.3 833 $ 175.0 2,016 $ 431.0 2,241 $ 463.7
Midwest .... 472 119.4 468 118.2 1,323 333.5 1,335 335.3
Southeast .. 838 139.1 1,099 194.8 2,516 429.7 3,025 519.8
Southwest .. 3,062 516.4 3,581 607.7 7,971 1,352.9 9,938 1,677.9
West ....... 2,717 808.0 3,024 1,013.2 6,381 1,863.2 7,868 2,556.5
------- -------- ------ --------- ------- -------- ------ ---------
7,877 $ 1,750.2 9,005 $ 2,108.9 20,207 $ 4,410.3 24,407 $ 5,553.2
======= ======== ====== ========= ======= ======== ====== =========
SALES CONTRACT BACKLOG
As of June 30,
---------------------------------------------
2002 2003
--------------------- ---------------------
Units $'s Units $'s
------- ---------- ------- ----------
Mid-Atlantic ....................... 1,277 $ 271.3 1,678 $ 378.3
Midwest ............................ 989 270.4 1,035 288.9
Southeast .......................... 1,628 262.4 1,958 377.9
Southwest .......................... 5,868 984.4 6,809 1,134.4
West ............................... 3,824 1,159.7 5,421 1,848.9
------- ---------- ------- -----------
13,586 $ 2,948.2 16,901 $ 4,028.4
======= ========== ======= ===========