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

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

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

• Net income increased 13% to $249.8 million, or $0.66 per diluted share
• Pre-tax income increased 13% to $378.6 million
• Pre-tax profit margin improved 40 basis points to 11.7%
• Net sales orders increased 14% in value to $3.4 billion and 13% in homes to 11,714
• Homes closed increased 9% in value to $3.1 billion and 9% in homes to 10,739
• Sales order backlog increased 17% in value to $4.4 billion and 15% in homes to 14,670
• Net cash provided by operations for the first nine months of fiscal 2016 was $88.6 million

D.R. Horton, Inc. (NYSE:DHI), America’s Builder, today reported that net income for its third fiscal quarter ended June 30, 2016 increased 13% to $249.8 million, or $0.66 per diluted share, from $221.4 million, or $0.60 per diluted share, in the same quarter of fiscal 2015. For the nine months ended June 30, 2016, net income increased 18% to $602.6 million, or $1.61 per diluted share, from $511.8 million, or $1.39 per diluted share, in the same period of fiscal 2015.

Net sales orders for the third quarter ended June 30, 2016 increased 13% to 11,714 homes and 14% in value to $3.4 billion, compared to 10,398 homes and $3.0 billion in the prior year quarter. The Company’s cancellation rate (cancelled sales orders divided by gross sales orders) for the third quarter of fiscal 2016 was 21%. Net sales orders for the first nine months of fiscal 2016 increased 11% to 32,070 homes and 13% in value to $9.4 billion, compared to 28,903 homes and $8.3 billion in the first nine months of fiscal 2015.

The Company’s sales order backlog of homes under contract at June 30, 2016 increased 15% to 14,670 homes and 17% in value to $4.4 billion, compared to 12,761 homes and $3.7 billion at June 30, 2015.

Homebuilding revenue for the third quarter of fiscal 2016 increased 9% to $3.1 billion from $2.9 billion in the same quarter of fiscal 2015. Homes closed in the quarter increased 9% to 10,739 homes, compared to 9,856 homes in the prior year quarter. Homebuilding revenue for the nine months ended June 30, 2016 increased 10% to $8.2 billion from $7.5 billion in the first nine months of fiscal 2015. Homes closed in the nine-month period increased 8% to 28,062, compared to 26,072 homes in the same period of fiscal 2015.

Pre-tax profit margin for the third quarter of fiscal 2016 improved 40 basis points to 11.7% from 11.3% in the same quarter of fiscal 2015. The improvement in pre-tax profit margin was driven by a 40 basis point increase in the Company's home sales gross margin and a 10 basis point decline in homebuilding SG&A expense as a percentage of revenues.

Home sales gross margin in the third quarter of fiscal 2016 was 20.3%, compared to 19.9% in the prior year quarter. The improvement in gross margin was primarily due to the Company controlling cost increases while also reducing incentives or raising prices when possible. In the current housing market, the Company continues to expect its average home sales gross margin to be around 20%, with quarterly fluctuations that may range from 19% to 21% due to product and geographic mix and the relative impact of warranty and interest costs. Homebuilding SG&A expense as a percentage of revenues in the third quarter of fiscal 2016 was 8.9%, compared to 9.0% in the prior year quarter.

Net cash provided by operations for the first nine months of fiscal 2016 was $88.6 million. During the third quarter, the Company repaid at maturity $372.7 million principal amount of its 6.5% senior notes. The Company ended the quarter with $862.9 million of homebuilding unrestricted cash and homebuilding debt to total capital of 30.0%. Homebuilding debt to total capital consists of homebuilding notes payable divided by total equity plus homebuilding notes payable.

Donald R. Horton, Chairman of the Board, said, “The D.R. Horton team delivered a strong third quarter, highlighted by $378.6 million of pre-tax income on $3.2 billion of revenues. Our pre-tax profit margin improved 40 basis points from the prior year quarter to 11.7%. Our net sales orders in the third quarter increased 13% due to continued improvement in our absorptions, while our consolidated revenues increased 10%, and the value of our sales order backlog increased 17%. We also generated positive cash flow from operations during the quarter.

“Solid performance in our three core brands is enabling us to capitalize on market opportunities and continue to expand our industry-leading market share. We remain focused on growing our revenues and pre-tax profits at a double-digit annual pace, while generating positive operating cash flows and improved returns. With a sales backlog of 14,670 homes at the end of June and a robust lot supply and inventory of homes available for sale, we are well-positioned for the fourth quarter and fiscal 2017.”

The Company has declared a quarterly cash dividend of $0.08 per common share. The dividend is payable on August 19, 2016 to stockholders of record on August 8, 2016.

The Company will host a conference call today (Thursday, July 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 78 markets in 26 states across the United States and closed 38,638 homes in the twelve-month period ended June 30, 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 the Company continues to expect its average home sales gross margin to be around 20%, with quarterly fluctuations that may range from 19% to 21% due to product and geographic mix and the relative impact of warranty and interest costs and that solid performance in our three core brands is enabling us to capitalize on market opportunities and continue to expand our industry-leading market share. The forward-looking statements also include that we remain focused on growing our revenues and pre-tax profits at a double-digit annual pace, while generating positive operating cash flows and improved returns and that with a sales backlog of 14,670 homes at the end of June and a robust lot supply and inventory of homes available for sale, we are well-positioned for the fourth quarter and fiscal 2017.

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.

View source version on businesswire.com: http://www.businesswire.com/news/home/20160721005288/en/

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

Source: D.R. Horton, Inc.