FORT WORTH, Texas--(BUSINESS WIRE)--Aug. 5, 2008--D.R. Horton,
Inc. (NYSE:DHI), America's Builder, today reported a net loss for its
third fiscal quarter ended June 30, 2008 of $399.3 million or $1.26
per diluted share. The quarterly results included $330.4 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, and an
after-tax valuation allowance primarily for deferred tax assets
created during the quarter of $168.7 million. The net loss for the
same quarter of fiscal 2007 was $823.8 million or $2.62 per diluted
share. Homebuilding revenue for the third quarter of fiscal 2008
totaled $1.4 billion, compared to $2.5 billion in the same quarter of
fiscal 2007. Homes closed in the current quarter totaled 6,167,
compared to 9,643 homes closed in the year ago quarter.
For the nine months ended June 30, 2008, the Company reported a
net loss totaling $1.8 billion, or $5.81 per diluted share. The
nine-month results included pre-tax charges to cost of sales of $1.4
billion of inventory impairments and write-offs of deposits and
pre-acquisition costs related to land option contracts that the
Company does not intend to pursue, and an after-tax valuation
allowance of $883.0 million to the deferred tax asset. The net loss
for the nine months ended June 30, 2007 was $662.3 million or $2.11
per diluted share. Homebuilding revenue for the nine months ended June
30, 2008 totaled $4.8 billion, compared to $8.0 billion for the same
period of fiscal 2007. Homes closed in the nine-month period totaled
19,435, compared to 29,637 homes closed in the same period of fiscal
2007.
The Company's sales backlog of homes under contract at June 30,
2008 was 8,281 homes ($1.9 billion), compared to 15,801 homes ($4.4
billion) at June 30, 2007. Net sales orders for the third quarter
ended June 30, 2008 totaled 5,501 homes ($1.2 billion), compared to
8,559 homes ($2.0 billion) for the same quarter of fiscal 2007. The
Company's cancellation rate (cancelled sales orders divided by gross
sales orders) for the third quarter of fiscal 2008 was 39%. Net sales
orders for the first nine months of fiscal 2008 were 17,274 homes
($3.8 billion), compared to 27,313 homes ($6.9 billion) for the same
period of fiscal 2007.
Donald R. Horton, Chairman of the Board, said, "Although market
conditions in the homebuilding industry remain challenging, we
continue to focus on reducing our inventory and generating cash flow
from operations. We generated approximately $390 million of cash flow
from operations this quarter, bringing the year-to-date total to $1.4
billion and increasing our homebuilding cash balance to $819 million.
We also maintained our focus on controlling our costs, reducing our
homebuilding SG&A expenses by approximately $73 million in our quarter
ended June 30, 2008, compared to the year ago quarter."
The Company will host a conference call today (Tuesday, August
5th) at 10:00 a.m. Eastern time. The dial-in number is 800-374-9096,
and the call will also be webcast from www.drhorton.com on the
"Investor Relations" page.
The Company has declared a quarterly cash dividend of seven and
one-half cents ($0.075) per share. The dividend is payable on August
28, 2008 to stockholders of record on August 18, 2008.
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 80 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.
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 continued focus on reducing
inventory, generating cash flow from operations, maintaining our focus
on controlling costs and paying the declared dividend. 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; 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
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
Three months ended Nine months ended
June 30, June 30,
-------------------- ---------------------
2008 2007 2008 2007
--------- ---------- ---------- ----------
(In millions, except per share data)
Homebuilding:
Revenues:
Home sales $1,415.0 $ 2,470.5 $ 4,619.8 $ 7,753.1
Land/lot sales 18.3 77.6 145.1 212.7
--------- ---------- ---------- ----------
1,433.3 2,548.1 4,764.9 7,965.8
--------- ---------- ---------- ----------
Cost of sales:
Home sales 1,271.7 2,058.8 4,097.1 6,380.2
Land/lot sales 14.2 65.6 118.0 187.6
Inventory impairments
and land option cost
write-offs 330.4 852.0 1,410.0 1,010.8
--------- ---------- ---------- ----------
1,616.3 2,976.4 5,625.1 7,578.6
--------- ---------- ---------- ----------
Gross profit (loss):
Home sales 143.3 411.7 522.7 1,372.9
Land/lot sales 4.1 12.0 27.1 25.1
Inventory impairments
and land option cost
write-offs (330.4) (852.0) (1,410.0) (1,010.8)
--------- ---------- ---------- ----------
(183.0) (428.3) (860.2) 387.2
--------- ---------- ---------- ----------
Selling, general and
administrative expense 194.7 267.5 616.1 858.9
Goodwill impairment - 425.6 - 425.6
Interest expense 11.7 - 22.9 -
Loss on early retirement
of debt 2.6 12.1 2.6 12.1
Other income (3.5) (3.9) (7.0) (5.7)
--------- ---------- ---------- ----------
Operating loss from
Homebuilding (388.5) (1,129.6) (1,494.8) (903.7)
--------- ---------- ---------- ----------
Financial Services:
Revenues 30.9 50.0 98.8 158.3
General and
administrative expense 23.1 36.0 76.4 119.3
Interest expense 0.6 4.1 2.7 20.5
Interest and other
income (2.2) (8.3) (8.5) (34.2)
--------- ---------- ---------- ----------
Operating income from
Financial Services 9.4 18.2 28.2 52.7
--------- ---------- ---------- ----------
Loss before income taxes (379.1) (1,111.4) (1,466.6) (851.0)
Provision for (benefit
from) income taxes 20.2 (287.6) 367.2 (188.7)
--------- ---------- ---------- ----------
Net loss $ (399.3) $ (823.8) $(1,833.8) $ (662.3)
========= ========== ========== ==========
Basic and Diluted:
Net loss per share $ (1.26) $ (2.62) $ (5.81) $ (2.11)
========= ========== ========== ==========
Weighted average number
of common shares 316.0 314.3 315.5 313.9
========= ========== ========== ==========
Other Consolidated
Financial Data:
Interest amortized to
home and land/lot cost
of sales $ 44.9 $ 60.8 $ 178.1 $ 171.5
========= ========== ========== ==========
Depreciation and
amortization $ 13.0 $ 16.4 $ 42.1 $ 48.3
========= ========== ========== ==========
Interest incurred $ 59.1 $ 80.1 $ 180.6 $ 253.0
========= ========== ========== ==========
D.R. HORTON, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
June 30, September 30,
2008 2007
--------- -------------
ASSETS (In millions)
Homebuilding:
Cash and cash equivalents $ 819.4 $ 228.3
Inventories:
Construction in progress and finished homes 2,064.1 3,346.8
Residential land and lots - developed and
under development 3,505.3 5,334.7
Land held for development 735.4 540.1
Land inventory not owned 91.9 121.9
--------- -------------
6,396.7 9,343.5
Property and equipment, net 78.9 110.2
Deferred income taxes, net 518.7 863.8
Earnest money deposits and other assets 230.8 291.2
Goodwill 95.3 95.3
--------- -------------
8,139.8 10,932.3
--------- -------------
Financial Services:
Cash and cash equivalents 31.8 41.3
Mortgage loans held for sale 246.4 523.5
Other assets 46.5 59.2
--------- -------------
324.7 624.0
--------- -------------
$8,464.5 $ 11,556.3
========= =============
LIABILITIES
Homebuilding:
Accounts payable $ 285.2 $ 566.2
Accrued expenses and other liabilities 803.7 933.3
Notes payable 3,581.6 3,989.0
--------- -------------
4,670.5 5,488.5
--------- -------------
Financial Services:
Accounts payable and other liabilities 17.2 24.7
Notes payable 86.5 387.8
--------- -------------
103.7 412.5
--------- -------------
4,774.2 5,901.0
--------- -------------
Minority interests 32.5 68.4
--------- -------------
STOCKHOLDERS' EQUITY
Common stock 3.2 3.2
Additional capital 1,716.2 1,693.3
Retained earnings 2,034.1 3,986.1
Treasury stock, at cost (95.7) (95.7)
--------- -------------
3,657.8 5,586.9
--------- -------------
$8,464.5 $ 11,556.3
========= =============
D.R. HORTON, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Nine Months Ended
June 30, 2008
-----------------
(In millions)
Operating Activities
Net loss $ (1,833.8)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 42.1
Amortization of debt discounts and fees 5.3
Stock option compensation expense 9.6
Income tax benefit from stock option exercises (2.7)
Deferred income taxes 345.1
Loss on early retirement of debt 2.6
Inventory impairments and land option cost write-
offs 1,410.0
Changes in operating assets and liabilities:
Decrease in construction in progress and finished
homes 991.2
Decrease in residential land and lots --
developed, under development, and held for
development 518.8
Decrease in earnest money deposits and other
assets 58.6
Decrease in mortgage loans held for sale 277.1
Decrease in accounts payable, accrued expenses
and other liabilities (423.5)
-----------------
Net cash provided by operating activities 1,400.4
-----------------
Investing Activities
Purchases of property and equipment (9.1)
-----------------
Net cash used in investing activities (9.1)
-----------------
Financing Activities
Proceeds from notes payable 204.4
Repayment of notes payable (907.8)
Proceeds from stock associated with certain
employee benefit plans 9.2
Income tax benefit from stock option exercises 2.7
Cash dividends paid (118.2)
-----------------
Net cash used in financing activities (809.7)
-----------------
Increase in Cash and Cash Equivalents 581.6
Cash and cash equivalents at beginning of period 269.6
-----------------
Cash and cash equivalents at end of period $ 851.2
=================
D.R. HORTON, INC.
($'s in millions)
NET SALES ORDERS
Three Months Ended June 30,
--------------------------------
2008 2007
---------------- ---------------
Homes Value Homes Value
------- -------- ------ --------
Northeast 372 $ 95.4 717 $ 191.7
Midwest 406 121.1 711 213.8
Southeast 841 172.3 1,500 323.7
South Central 1,904 344.5 2,541 443.5
Southwest 864 164.7 1,614 312.0
California 636 194.3 804 307.1
West 478 144.5 672 237.0
------- -------- ------ --------
5,501 $1,236.8 8,559 $2,028.8
======= ======== ====== ========
Nine Months Ended June 30,
-------------------------------
2008 2007
--------------- ---------------
Homes Value Homes Value
------ -------- ------ --------
Northeast 1,225 $ 315.8 2,527 $ 669.1
Midwest 1,145 331.5 2,584 745.8
Southeast 2,586 508.4 4,301 961.1
South Central 5,896 1,048.2 7,198 1,282.2
Southwest 2,962 557.5 5,120 1,010.7
California 2,127 655.3 3,247 1,413.2
West 1,333 408.3 2,336 838.9
------ -------- ------ --------
17,274 $3,825.0 27,313 $6,921.0
====== ======== ====== ========
HOMES CLOSED
Three Months Ended June 30,
-----------------------------
2008 2007
-------------- --------------
Homes Value Homes Value
----- -------- ----- --------
Northeast 540 $ 134.7 919 $ 247.1
Midwest 357 107.8 774 235.7
Southeast 890 186.2 1,575 367.6
South Central 1,894 344.5 2,746 490.7
Southwest 1,322 259.9 2,009 450.0
California 711 237.3 913 425.1
West 453 144.6 707 254.3
----- -------- ----- --------
6,167 $1,415.0 9,643 $2,470.5
===== ======== ===== ========
Nine Months Ended June 30,
-------------------------------
2008 2007
--------------- ---------------
Homes Value Homes Value
------ -------- ------ --------
Northeast 1,737 $ 445.8 2,949 $ 771.3
Midwest 1,302 391.8 2,519 745.0
Southeast 2,775 600.5 4,497 1,076.3
South Central 5,857 1,051.9 7,936 1,418.7
Southwest 4,146 861.6 5,951 1,349.1
California 2,207 806.8 3,534 1,597.4
West 1,411 461.4 2,251 795.3
------ -------- ------ --------
19,435 $4,619.8 29,637 $7,753.1
====== ======== ====== ========
SALES ORDER BACKLOG
As of June 30,
--------------------------------
2008 2007
---------------- ---------------
Homes Value Homes Value
------- -------- ------ --------
Northeast 682 $ 176.6 1,806 $ 485.0
Midwest 443 131.8 1,102 343.0
Southeast 1,009 217.5 1,952 518.6
South Central 2,732 492.5 3,475 641.3
Southwest 2,014 402.4 4,560 1,079.2
California 861 279.4 1,801 857.6
West 540 199.4 1,105 428.3
------- -------- ------ --------
8,281 $1,899.6 15,801 $4,353.0
======= ======== ====== ========
CONTACT:
D.R. Horton, Inc.
Stacey Dwyer, EVP, 817-390-8200
SOURCE:
D.R. Horton, Inc.
