FORT WORTH, Texas--(BUSINESS WIRE)--Nov. 4, 2008--D.R. Horton,
Inc. (NYSE:DHI), America's Builder, today reported preliminary results
for its fourth quarter ended September 30, 2008. Home sales revenue
for the fourth quarter of fiscal 2008 totaled $1.5 billion on 6,961
homes closed, compared to $3.0 billion in the same quarter of fiscal
2007 on 11,733 homes closed. Land and lot sales revenue in the fourth
quarter approximated $200 million. Approximately 32,000 lots were sold
during the quarter, of which 55% were undeveloped, 20% were partially
developed and 25% were fully developed. The Company owned
approximately 99,000 lots at September 30, 2008.
Pre-tax charges to cost of sales in the fourth quarter 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 are expected to be approximately $1.1 billion, the
majority of which relate to impairment charges on the land and lots
sold during the quarter. Additionally, the Company expects a pre-tax
goodwill impairment charge for the fourth quarter of approximately $80
million. The Company's net loss for the fourth quarter is estimated to
be in the range of $800 to $900 million, which reflects an expected
tax benefit of approximately $350 million.
The Company's sales backlog of homes under contract at September
30, 2008 was 5,297 homes ($1.2 billion), compared to 10,442 homes
($2.7 billion) at September 30, 2007. Net sales orders for the fourth
quarter ended September 30, 2008 totaled 3,977 homes ($852.3 million),
compared to 6,374 homes ($1.3 billion) for the same quarter of fiscal
2007. The Company's cancellation rate (cancelled sales orders divided
by gross sales orders) for the fourth quarter of fiscal 2008 was 47%.
The Company's homebuilding cash balance at September 30, 2008 was
$1.4 billion, reflecting an increase of more than $500 million during
the quarter, and the Company expects to receive a federal income tax
refund in the range of $600 million to $625 million in December 2008.
At September 30, 2008, the Company had no cash borrowings outstanding
on its revolving credit facility and was in compliance with all of its
covenants. As a result of inventory reductions achieved during the
quarter, the Company's borrowing base availability under the facility
is expected to be less than $100 million. However, the Company
currently does not anticipate a need to borrow from the facility. The
Company is exploring alternatives with regard to its credit facility,
which could potentially include an amendment to the current agreement.
In the fourth quarter, the Company, through unsolicited
transactions, repurchased $1.4 million principal amount of its 9.75%
senior subordinated notes due 2010 and a total of $35.3 million
principal amount of its 8% senior notes due 2009.
Donald R. Horton, Chairman of the Board, said, "Market conditions
in the homebuilding industry deteriorated during our fourth fiscal
quarter and October, characterized by rising foreclosures, high
inventory levels of both new and existing homes and reduced liquidity
in the mortgage markets. In addition, consumer confidence has been
eroded by a weakening economy, higher unemployment and record
volatility in the capital markets.
"We remain focused on controlling our cost structure, reducing our
inventory and generating cash flow from operations. Our closings and
land sale efforts during the fourth quarter led to a 26% reduction in
our owned lot position and an increase in our homebuilding cash
balance to $1.4 billion at September 30, 2008. Our expectation for
fiscal 2009 is to generate positive operating cash flow in addition to
the cash provided by our expected tax refund."
These results are preliminary and unaudited. The Company will
announce final results for its fourth quarter and fiscal year ended
September 30, 2008 on Tuesday, November 25, 2008 before the market
opens. The Company will also host a conference call the same day at
10:00 a.m. Eastern time. The dial-in number is 800-374-9096. The call
will also be webcast from www.drhorton.com on the "Investor Relations"
page.
D.R. Horton, Inc., America's Builder, is the largest homebuilder
in the United States, delivering more than 26,000 homes in its fiscal
year ended September 30, 2008. Founded in 1978 in Fort Worth, Texas,
D.R. Horton has operations in 77 markets in 27 states in the East,
Midwest, Southeast, South Central, Southwest 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.
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 expectations for the fourth
quarter of pre-tax charges to cost of sales for inventory impairments
and write-offs of approximately $1.1 billion, a pre-tax goodwill
impairment charge of approximately $80 million, a tax benefit of
approximately $350 million, a net loss in the range of $800 to $900
million, a federal income tax refund of $600 million to $625 million
in December 2008, the borrowing base availability under the credit
facility to be less than $100 million, not anticipating a need to
borrow cash from our credit facility, a continued focus on controlling
costs, reducing inventory and generating positive cash flow from
operations in fiscal 2009 in addition to the cash provided by our
expected tax refund. 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: completion
of the Company's year-end financial reporting procedures and related
audit by its independent accountants; 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; failure to comply with certain
financial tests or meet ratios contained in our revolving credit
facility; competitive conditions within our industry; the availability
of capital; our ability to effect any future growth strategies
successfully; our ability to realize our deferred income tax asset;
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
CONTACT:
D.R. Horton, Inc.
Stacey Dwyer, EVP, 817-390-8200
SOURCE:
D.R. Horton, Inc.
