D.R. Horton, Inc., America’s Builder, Reports Fiscal 2016 Second Quarter Earnings and Declares Quarterly Dividend of $0.08 Per Share

FORT WORTH, Texas--(BUSINESS WIRE)-- D.R. Horton, Inc.:

Fiscal 2016 Second Quarter Highlights - comparisons to the same period in the prior year

• Net income increased 32% to $195.1 million, or $0.52 per diluted share
• Pre-tax income increased 31% to $300.5 million
• Pre-tax profit margin improved 130 basis points to 10.9%
• Net sales orders increased 13% in value to $3.6 billion and 10% in homes to 12,292
• Homes closed increased 16% in value to $2.7 billion and 12% in homes to 9,262
• Sales order backlog increased 14% in value to $4.1 billion and 12% in homes to 13,695
• Net cash provided by operations for the six months ended March 31, 2016 was $26.9 million, compared to net cash used in operations of $168.8 million
• Increases fiscal 2016 guidance for consolidated pre-tax profit margin to a range of 10.7% to 11.2%
• Reaffirms fiscal 2016 guidance for consolidated revenues of $12.0 billion to $12.5 billion

D.R. Horton, Inc. (NYSE:DHI), America’s Builder, today reported that net income for its second fiscal quarter ended March 31, 2016 increased 32% to $195.1 million, or $0.52 per diluted share, from $147.9 million, or $0.40 per diluted share, in the same quarter of fiscal 2015. Homebuilding revenue for the second quarter of fiscal 2016 increased 16% to $2.7 billion from $2.3 billion in the same quarter of fiscal 2015. Homes closed in the quarter increased 12% to 9,262 homes, compared to 8,243 homes in the prior year quarter.

For the six months ended March 31, 2016, net income increased 21% to $352.8 million, or $0.94 per diluted share, from $290.4 million, or $0.79 per diluted share, in the same period of fiscal 2015. Homebuilding revenue for the six months ended March 31, 2016 increased 10% to $5.1 billion from $4.6 billion in the first six months of fiscal 2015. Homes closed in the six-month period increased 7% to 17,323, compared to 16,216 homes in the same period of fiscal 2015.

Net sales orders for the second quarter ended March 31, 2016 increased 10% to 12,292 homes and 13% in value to $3.6 billion, compared to 11,135 homes and $3.2 billion in the prior year quarter. The Company’s cancellation rate (cancelled sales orders divided by gross sales orders) for the second quarter of fiscal 2016 was 19%. Net sales orders for the first six months of fiscal 2016 increased 10% to 20,356 homes from 18,505 homes in the first six months of fiscal 2015, and the value of net sales orders increased 13% to $5.9 billion from $5.3 billion.

The Company’s sales order backlog of homes under contract at March 31, 2016 increased 12% to 13,695 homes and 14% in value to $4.1 billion, compared to 12,177 homes and $3.6 billion at March 31, 2015.

During the quarter, the Company repaid at maturity $170.2 million principal amount of its 5.625% senior notes and ended the quarter with $1.2 billion of homebuilding unrestricted cash and homebuilding debt to total capital of 33.6%. Subsequent to quarter end, the Company repaid at maturity $372.7 million principal amount of its 6.5% senior notes.

Donald R. Horton, Chairman of the Board, said, “The spring selling season is off to a great start at D.R. Horton. Our team delivered a strong second quarter, highlighted by $300.5 million of pre-tax income on $2.8 billion of revenues. Our pre-tax profit margin improved 130 basis points from the prior year quarter to 10.9%. The number and dollar value of our homes sold, closed and in backlog all increased by double-digit percentages. Our net sales orders in the March quarter increased 52% sequentially from the December quarter and 10% from the March quarter last year.

“Solid performance in our three core brands is enabling us to capitalize on market opportunities and expand our industry-leading market share. With a sales backlog of 13,695 homes at the end of March and a robust lot supply and inventory of homes available for sale, we are well-positioned for the second half of fiscal 2016. We remain focused on growing our revenues and pre-tax profits at a double-digit annual pace, while generating positive cash flows and improved returns.”

D.R. Horton is increasing its fiscal 2016 guidance for consolidated pre-tax profit margin to a range of 10.7% to 11.2% from its prior guidance of 10.5% to 11.0%. The Company is also updating its annual guidance for homebuilding SG&A to 9.0% to 9.2% of homebuilding revenues from its prior guidance of 9.2% to 9.4%.

D.R. Horton reaffirms its previously issued fiscal 2016 guidance for other metrics including:

• Consolidated revenues of $12.0 billion to $12.5 billion
• Homes closed between 39,500 homes and 41,500 homes
• Home sales gross margin in the high 19s to 20%
• Financial services pre-tax profit margin between 30% and 33%
• Income tax rate of 35% to 36%
• Diluted share count of approximately 375 million shares
• Cash flow from operations of $300 million to $500 million

The Company has declared a quarterly cash dividend of $0.08 per common share. The dividend is payable on May 27, 2016 to stockholders of record on May 13, 2016.

The Company will host a conference call today (Thursday, April 21st) at 10:00 a.m. Eastern Time. The dial-in number is 877-407-8033, and the call will also be webcast from the Company’s website at investor.drhorton.com.

D.R. Horton, Inc., America’s Builder, has been the largest homebuilder by volume in the United States for fourteen consecutive years. Founded in 1978 in Fort Worth, Texas, D.R. Horton has operations in 79 markets in 26 states across the United States and closed 37,755 homes in the twelve-month period ended March 31, 2016. The Company is engaged in the construction and sale of high-quality homes through its diverse brand portfolio that includes D.R. Horton, Express Homes and Emerald Homes with sales prices ranging from $100,000 to over $1,000,000. 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 include that with a sales backlog of 13,695 homes at the end of March and a robust lot supply and inventory of homes available for sale, we are well-positioned for the second half of fiscal 2016 and that we remain focused on growing our revenues and pre-tax profits at a double-digit annual pace, while generating positive cash flows and improved returns. The forward-looking statements also include that D.R. Horton is updating its fiscal 2016 guidance for pre-tax profit margin and homebuilding SG&A and is reaffirming its previously issued fiscal 2016 guidance for other metrics.

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: the cyclical nature of the homebuilding industry and changes in economic, real estate and other conditions; constriction of the credit markets, which could limit our ability to access capital and increase our costs of capital; reductions in the availability of mortgage financing and the liquidity provided by government-sponsored enterprises, the effects of government programs, a decrease in our ability to sell mortgage loans on attractive terms or an increase in mortgage interest rates; the risks associated with our land and lot inventory; home warranty and construction defect claims; supply shortages and other risks of acquiring land, building materials and skilled labor; reductions in the availability of performance bonds; increases in the costs of owning a home; the impact of an inflationary, deflationary or higher interest rate environment; the effects of governmental regulations and environmental matters on our homebuilding operations; the effects of governmental regulations on our financial services operations; our substantial debt and our ability to comply with related debt covenants, restrictions and limitations; competitive conditions within the homebuilding and financial services industries; our ability to effect our growth strategies or acquisitions successfully; the effects of the loss of key personnel; the effects of negative publicity; and information technology failures and data security breaches. 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 our most recent quarterly report on Form 10-Q, both of which are filed with the Securities and Exchange Commission.

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D.R. Horton, Inc.
Jessica Hansen, 817-390-8200
Vice President of Investor Relations
[email protected]

Source: D.R. Horton, Inc.