FORT WORTH, Texas, Feb. 7, 2008 (PRIME NEWSWIRE) -- D.R. Horton, Inc. (NYSE:DHI), America's Builder, today reported a net loss for its first fiscal quarter ended December 31, 2007 of $128.8 million, or $0.41 per diluted share. The quarterly results included $245.5 million in pre-tax charges to cost of sales for inventory impairments and write-offs of deposits and pre-acquisition costs related to land option contracts that the Company does not intend to pursue. Net income for the same quarter of fiscal 2007 was $109.7 million, or $0.35 per diluted share. Homebuilding revenue for the first quarter of fiscal 2008 totaled $1.7 billion, compared to $2.8 billion in the same quarter of fiscal 2007. Homes closed totaled 6,549 homes, compared to 10,202 homes in the year ago quarter.
The Company's sales order backlog of homes under contract at December 31, 2007 was 8,138 homes ($2.0 billion), compared to 16,694 homes ($4.7 billion), at December 31, 2006. Net sales orders for the quarter totaled 4,245 homes ($0.9 billion), compared to 8,771 homes ($2.3 billion) for the same quarter of fiscal 2007. The Company's cancellation rate (cancelled sales orders divided by gross sales orders) for the first quarter of fiscal 2008 was 44%.
The Company reported $558 million in net cash provided by operating activities in the quarter ended December 31, 2007. The two main sources of cash from operating activities were a reduction in inventories of $476 million and a decrease in mortgage loans held for sale of $278 million. The main use of cash in operating activities was a reduction in accounts payable, accrued expenses and other liabilities of $296 million. In financing activities, cash was used to reduce the balance on the homebuilding revolving credit facility from $150 million to $0, repay the $215 million senior notes which matured in December 2007 and reduce financial services debt by $282 million, for a total of $647 million of debt reductions during the quarter.
The Company will host a conference call today (Thursday, February 7th) at 9 a.m. ET. The dial-in number is 800-374-9096, and the call will also be webcast from www.drhorton.com on the "Investor Relations" page.
Donald R. Horton, Chairman of the Board, said, "Market conditions remained challenging in our December quarter as inventory levels of both new and existing homes remained high while pricing remained very competitive. Lending standards continue to be more restrictive than during the previous year, and buyers continued to approach the home buying decision cautiously. We expect the housing environment to remain challenging.
"Despite these challenging conditions, we continue to focus on reducing inventory, generating cash flow from operations, controlling costs and reducing outstanding debt as we work to adjust our inventories to appropriate levels relative to housing demand. We reduced both our owned lots and our homes in residential inventory by more than 10% from September 30, 2007. As we focus on inventory reduction and capital preservation, our goal for fiscal 2008 is to generate at least $1 billion in cash flow from operations. We made an excellent start on this goal by generating over $550 million in cash flow from operations in our first quarter, primarily driven by $476 million in cash generated by reducing our inventories."
D.R. Horton, Inc., America's Builder, is the largest homebuilder in the United States, delivering more than 41,000 homes in its fiscal year ended September 30, 2007. Founded in 1978 in Fort Worth, Texas, D.R. Horton has operations in 82 markets in 27 states in the Northeast, Midwest, Southeast, South Central, Southwest, California and West regions of the United States. The Company is engaged in the construction and sale of high quality homes with sales prices ranging from $90,000 to over $900,000. D.R. Horton also provides mortgage financing and title services for homebuyers through its mortgage and title subsidiaries.
The D.R. Horton, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4317
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 our expectation for the housing environment to remain challenging; our continued focus on reducing inventory and preserving capital, generating cash flow from operations, controlling costs and reducing outstanding debt; adjusting inventories to appropriate levels relative to housing demand; and our goal to generate at least $1 billion in cash flow from operations in fiscal 2008. 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: further deterioration in industry conditions; the reduction of liquidity in the financial markets; limitations on our strategies in responding to adverse conditions in the industry; changes in general economic, real estate, construction and other business conditions; changes in interest rates, the availability of mortgage financing or other costs of owning a home; the effects of governmental regulations and environmental matters; our substantial debt; competitive conditions within our industry; the availability of capital; our ability to effect any future growth strategies successfully; and the uncertainties inherent in home warranty and construction defect claims matters. 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 report on Form 10-Q, which are filed with the Securities and Exchange Commission.
WEBSITE ADDRESS: www.DRHORTON.com
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three Months Ended
December 31,
------------------------------------
2007 2006
---------------- ----------------
(In millions, except per share data)
Homebuilding:
Revenues:
Home sales $ 1,607.0 $ 2,761.1
Land/lot sales 100.6 40.4
-------------- --------------
1,707.6 2,801.5
-------------- --------------
Cost of sales:
Home sales 1,377.9 2,246.9
Land/lot sales 82.6 32.9
Inventory impairments and land option
cost write-offs 245.5 77.7
-------------- --------------
1,706.0 2,357.5
-------------- --------------
Gross profit:
Home sales 229.1 514.2
Land/lot sales 18.0 7.5
Inventory impairments and land option
cost write-offs (245.5) (77.7)
-------------- --------------
1.6 444.0
-------------- --------------
Selling, general and administrative
expense 213.1 295.3
Other (income) (1.7) (1.1)
-------------- --------------
Operating income (loss)
from Homebuilding (209.8) 149.8
-------------- --------------
Financial Services:
Revenues 35.0 66.5
General and administrative expense 30.5 45.0
Interest expense 1.3 9.7
Interest and other (income) (3.7) (15.3)
-------------- --------------
Operating income from Financial Services 6.9 27.1
-------------- --------------
Income (loss) before income taxes (202.9) 176.9
Provision for (benefit from) income
taxes (74.1) 67.2
-------------- --------------
Net income (loss) $ (128.8) $ 109.7
============== ==============
Basic:
Net income (loss) per share $ (0.41) $ 0.35
============== ==============
Weighted average number of common shares 315.0 313.4
============== ==============
Diluted:
Net income (loss) per share $ (0.41) $ 0.35
============== ==============
Weighted average number of common
shares 315.0 315.6
============== ==============
Other Consolidated Financial Data:
Interest amortized to home and land/lot
cost of sales $ 58.0 $ 53.0
============== ==============
Depreciation and amortization $ 14.9 $ 15.7
============== ==============
Interest incurred $ 62.8 $ 87.7
============== ==============
D.R. HORTON, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
December 31, September 30,
2007 2007
------------ ------------
ASSETS (In millions)
Homebuilding:
Cash and cash equivalents $ 90.4 $ 228.3
Inventories:
Construction in progress and finished
homes 2,937.4 3,346.8
Residential land and lots - developed
and under development 4,673.5 5,334.7
Land held for development 886.8 540.1
Land inventory not owned 88.6 121.9
------------ ------------
8,586.3 9,343.5
Property and equipment, net 99.9 110.2
Deferred income taxes 940.0 863.8
Earnest money deposits and other assets 258.8 291.2
Goodwill 95.3 95.3
------------ ------------
10,070.7 10,932.3
------------ ------------
Financial Services:
Cash and cash equivalents 38.7 41.3
Mortgage loans held for sale 245.1 523.5
Other assets 46.5 59.2
------------ ------------
330.3 624.0
------------ ------------
$10,401.0 $11,556.3
============ ============
LIABILITIES
Homebuilding:
Accounts payable $ 358.6 $ 566.2
Accrued expenses and other liabilities 849.9 933.3
Notes payable 3,618.3 3,989.0
------------ ------------
4,826.8 5,488.5
------------ ------------
Financial Services:
Accounts payable and other liabilities 16.1 24.7
Notes payable 105.9 387.8
------------ ------------
122.0 412.5
------------ ------------
4,948.8 5,901.0
------------ ------------
Minority interests 38.1 68.4
------------ ------------
STOCKHOLDERS' EQUITY
Common stock 3.2 3.2
Additional capital 1,696.6 1,693.3
Retained earnings 3,810.0 3,986.1
Treasury stock, at cost (95.7) (95.7)
------------ ------------
5,414.1 5,586.9
------------ ------------
$10,401.0 $11,556.3
============ ============
D.R. HORTON, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Three Months Ended
December 31, 2007
-------------------
(In millions)
Operating Activities
Net loss $ (128.8)
Adjustments to reconcile net loss to net cash provided by
operating activities:
Depreciation and amortization 14.9
Amortization of debt discounts and fees 1.6
Stock option compensation expense 2.7
Income tax benefit from stock option exercises (0.2)
Deferred income taxes (76.2)
Inventory impairments and land option cost write-offs 245.5
Changes in operating assets and liabilities:
Decrease in construction in progress and finished homes 313.1
Decrease in residential land and lots -- developed, under
development, and held for development 162.8
Decrease in earnest money deposits and other assets 40.2
Decrease in mortgage loans held for sale 278.4
Decrease in accounts payable, accrued expenses and other
liabilities (296.3)
---------
Net cash provided by operating activities 557.7
---------
Investing Activities
Purchases of property and equipment (4.1)
---------
Net cash used in investing activities (4.1)
---------
Financing Activities
Proceeds from notes payable 110.0
Repayment of notes payable (757.4)
Proceeds from stock associated with certain employee benefit
plans 0.4
Income tax benefit from stock option exercises 0.2
Cash dividends paid (47.3)
---------
Net cash used in financing activities (694.1)
---------
Decrease in Cash and Cash Equivalents (140.5)
Cash and cash equivalents at beginning of period 269.6
---------
Cash and cash equivalents at end of period $ 129.1
=========
D.R. HORTON, INC.
($'s in millions)
NET SALES ORDERS
Three Months Ended December 31,
--------------------------------------------
2007 2006
--------------------- ---------------------
Homes Value Homes Value
--------- ---------- --------- ----------
Northeast 344 $ 88.9 789 $ 212.3
Midwest 297 80.7 840 235.7
Southeast 581 107.7 1,372 321.6
South Central 1,585 277.3 1,923 348.5
Southwest 752 143.1 1,825 351.1
California 371 125.9 1,336 572.7
West 315 102.5 686 251.0
--------- ---------- --------- ----------
4,245 $ 926.1 8,771 $ 2,292.9
========= ========== ========= ==========
HOMES CLOSED
Three Months Ended December 31,
--------------------------------------------
2007 2006
--------------------- ---------------------
Homes Value Homes Value
--------- ---------- --------- ----------
Northeast 600 $ 157.9 1,001 $ 259.7
Midwest 523 156.6 948 281.4
Southeast 930 211.9 1,489 365.4
South Central 1,904 344.6 2,522 450.6
Southwest 1,509 331.9 1,850 426.4
California 667 258.5 1,583 695.6
West 416 145.6 809 282.0
--------- ---------- --------- ----------
6,549 $ 1,607.0 10,202 $ 2,761.1
========= ========== ========= ==========
SALES ORDER BACKLOG
As of December 31,
--------------------------------------------
2007 2006
--------------------- ---------------------
Homes Value Homes Value
--------- ---------- --------- ----------
Northeast 938 $ 237.6 2,016 $ 539.8
Midwest 374 116.2 929 296.5
Southeast 849 205.5 2,031 590.1
South Central 2,374 428.8 3,614 675.7
Southwest 2,441 517.7 5,366 1,342.2
California 645 298.3 1,841 918.8
West 517 209.4 897 353.8
--------- ---------- --------- ----------
8,138 $ 2,013.5 16,694 $ 4,716.9
========= ========== ========= ==========