FORT WORTH, Texas--(BUSINESS WIRE)--Nov. 20, 2007--D.R. Horton,
Inc. (NYSE:DHI), America's Builder, Tuesday (November 20, 2007),
reported a net loss for its fourth fiscal quarter ended September 30,
2007 of $50.1 million, or $0.16 per diluted share. The quarterly
results included pre-tax charges to cost of sales of $278.3 million of
inventory impairments and $40.3 million of write-offs of deposits and
pre-acquisition costs related to land option contracts that the
Company does not intend to pursue. Additionally, the results included
a pre-tax goodwill impairment charge of $48.5 million. Net income for
the same quarter of fiscal 2006 was $277.7 million, or $0.88 per
diluted share. Homebuilding revenue for the fourth quarter of fiscal
2007 totaled $3.1 billion, compared to $4.8 billion in the same
quarter of fiscal 2006. Homes closed in the current quarter totaled
11,733 homes, compared to 17,261 homes in the year ago quarter.
For the fiscal year ended September 30, 2007, the Company reported
a net loss totaling $712.5 million, or $2.27 per diluted share. The
fiscal 2007 results included pre-tax charges to cost of sales of
$1,222.2 million of inventory impairments and $107.3 million of
write-offs of deposits and pre-acquisition costs related to land
option contracts that the Company does not intend to pursue.
Additionally, the results included a pre-tax goodwill impairment
charge of $474.1 million. Net income for fiscal 2006 was $1.2 billion,
or $3.90 per diluted share. Homebuilding revenue for fiscal 2007
totaled $11.1 billion, compared to $14.8 billion for fiscal 2006.
Homes closed in fiscal 2007 totaled 41,370 homes, compared to 53,099
homes in fiscal 2006.
The Company's sales backlog of homes under contract at September
30, 2007 was 10,442 homes ($2.7 billion), compared to 18,125 homes
($5.2 billion) at September 30, 2006. As previously reported, net
sales orders for the fourth quarter ended September 30, 2007 totaled
6,374 homes ($1.3 billion), compared to 10,430 homes ($2.5 billion)
for the same quarter of fiscal 2006. Net sales orders for fiscal 2007
totaled 33,687 homes ($8.2 billion), compared to 51,980 homes ($13.9
billion) for fiscal 2006.
Donald R. Horton, Chairman of the Board, said, "Market conditions
continued to decline in our September quarter as inventory levels of
both new and existing homes remained high while pricing remained very
competitive. We also experienced reduced mortgage availability due to
tighter lending standards, and buyers continued to approach the home
buying decision cautiously. We expect the housing environment to
remain challenging.
"Despite these challenging conditions, we exceeded our goal of
generating $1 billion of cash flow from operations for the fiscal
year, and all of our regions generated profits before impairments and
land option cost write-offs for both the quarter and the fiscal year.
We reduced our homes in inventory by more than 7,000 homes during the
quarter to fewer than 20,000 homes at September 30, 2007. Cash flow
from operations totaled over $800 million for the quarter and more
than $1.3 billion for fiscal 2007. We used the fourth quarter cash
flow from operations primarily to reduce the outstanding balance on
our revolving credit facility from $750 million at June 30, 2007 to
$150 million at September 30, 2007, and we ended the year with $228
million in homebuilding cash. Our debt reduction and cash position
resulted in an improvement in our homebuilding net debt to total
capitalization ratio to 40.2%.
"In fiscal 2008, we will continue to focus on reducing inventory,
generating cash flow from operations, controlling costs and reducing
outstanding debt as we work to adjust our land and lot inventory and
our homes under construction to appropriate levels relative to housing
demand. We will also continue to closely monitor any capital outlays
for land and lot acquisition and development costs, and we expect to
significantly reduce those capital expenditures in fiscal 2008
compared to fiscal 2007. As we focus on inventory reduction and
capital preservation, our goal for fiscal 2008 is to again generate at
least $1 billion in cash flow from operations."
The Company will host a conference call Tuesday, November 20th at
10:00 a.m. Eastern Standard Time. The dial-in number is 800-374-9096.
The call will also be webcast from www.drhorton.com on the "Investor
Relations" page.
The Company will no longer report its quarterly net new sales
orders in advance of earnings. Beginning in the first quarter of
fiscal 2008, net sales orders will be reported in conjunction with the
Company's quarterly earnings release. Additionally, during the fourth
quarter, the Company aligned its external reporting regions with
changes in its internal operating regions. The new Midwest region
includes our operations in the following states: Colorado, Illinois,
Minnesota and Wisconsin. Colorado was previously reported in our
Southwest region and Illinois, Minnesota and Wisconsin were previously
reported in our Northeast region. The changes in reporting regions
have no effect on the Company's consolidated financial position,
results of operations or cash flows for the periods presented.
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 expanded its presence to include 83 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 expectation for the housing
market to remain challenging; our continued focus on reducing
inventory, generating positive cash flow from operations, controlling
costs and reducing outstanding debt; capital expenditures for land and
lot acquisition and development costs being reduced significantly in
fiscal 2008 compared to fiscal 2007; and our goal to again generate at
least $1 billion in cash flow from operations. 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: changes in general economic, real estate, construction,
and other business conditions; changes in interest rates, the
availability of mortgage financing or increases in the costs of owning
a home; governmental regulations and environmental matters; the
Company's substantial debt; competitive conditions within the
industry; the availability of capital to the Company on favorable
terms; the Company's ability to successfully effect its operational
strategies; and warranty and product liability claims. 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.
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF INCOME
(UNAUDITED)
Three Months Ended Fiscal Year Ended
September 30, September 30,
------------------- ---------------------
2006 2007 2006 2007
--------- --------- ---------- ----------
(In millions, except per share amounts)
Homebuilding:
Revenues:
Home sales $4,702.7 $2,968.2 $14,545.4 $10,721.2
Land/lot sales 95.9 154.8 215.1 367.6
-------- -------- --------- ---------
4,798.6 3,123.0 14,760.5 11,088.8
-------- -------- --------- ---------
Cost of sales:
Home sales 3,718.9 2,492.3 11,047.8 8,872.3
Land/lot sales 53.4 95.6 99.6 283.3
Inventory impairments and
land option cost write-offs 199.2 318.6 270.9 1,329.5
-------- -------- --------- ---------
3,971.5 2,906.5 11,418.3 10,485.1
-------- -------- --------- ---------
Gross profit:
Home sales 983.8 475.9 3,497.6 1,848.9
Land/lot sales 42.5 59.2 115.5 84.3
Inventory impairments and
land option cost write-offs (199.2) (318.6) (270.9) (1,329.5)
-------- -------- --------- ---------
827.1 216.5 3,342.2 603.7
-------- -------- --------- ---------
Selling, general and
administrative expense 409.7 282.6 1,456.6 1,141.5
Goodwill impairment - 48.5 - 474.1
Loss on early retirement of
debt 2.8 - 17.9 12.1
Other expense (income) 2.5 1.7 (11.0) (4.0)
-------- -------- --------- ---------
Operating income (loss) from
Homebuilding 412.1 (116.3) 1,878.7 (1,020.0)
-------- -------- --------- ---------
Financial Services:
Revenues 84.1 49.4 290.8 207.7
General and administrative
expense 54.5 34.4 202.2 153.8
Interest expense 12.5 3.1 37.1 23.6
Other (income) (16.6) (4.2) (56.9) (38.5)
-------- -------- --------- ---------
Operating income from
Financial Services 33.7 16.1 108.4 68.8
-------- -------- --------- ---------
Income (loss) before income
taxes 445.8 (100.2) 1,987.1 (951.2)
Provision for (benefit from)
income taxes 168.1 (50.1) 753.8 (238.7)
-------- -------- --------- ---------
Net income (loss) $ 277.7 $ (50.1) $ 1,233.3 $ (712.5)
======== ======== ========= =========
Basic:
Net income (loss) per share $ 0.89 $ (0.16) $ 3.94 $ (2.27)
======== ======== ========= =========
Weighted average number of
common shares 313.1 314.8 312.8 314.1
======== ======== ========= =========
Diluted:
Net income (loss) per share $ 0.88 $ (0.16) $ 3.90 $ (2.27)
======== ======== ========= =========
Weighted average number of
common shares 314.8 314.8 316.2 314.1
======== ======== ========= =========
Other Consolidated Financial
Data:
Interest amortized to home
and land/lot cost of sales $ 72.6 $ 48.7 $ 237.1 $ 220.3
======== ======== ========= =========
Depreciation and
amortization $ 15.8 $ 16.1 $ 56.5 $ 64.4
======== ======== ========= =========
Interest incurred $ 101.9 $ 74.9 $ 362.5 $ 327.8
======== ======== ========= =========
D.R. HORTON, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As of September 30,
---------------------
2006 2007
---------- ----------
(In millions)
ASSETS
Homebuilding:
Cash and cash equivalents $ 457.8 $ 228.3
Inventories:
Construction in progress and finished
homes 4,322.8 3,346.8
Residential land and lots - developed and
under development 6,737.0 5,334.7
Land held for development 182.9 540.1
Land inventory not owned 100.4 121.9
---------- ----------
11,343.1 9,343.5
Property and equipment, net 131.4 110.2
Deferred income taxes 374.0 863.8
Earnest money and other assets 442.4 291.2
Goodwill 578.9 95.3
---------- ----------
13,327.6 10,932.3
---------- ----------
Financial Services:
Cash and cash equivalents 129.8 41.3
Restricted cash 248.3 -
Mortgage loans held for sale 1,022.9 523.5
Other assets 92.1 59.2
---------- ----------
1,493.1 624.0
---------- ----------
$14,820.7 $11,556.3
========== ==========
LIABILITIES
Homebuilding:
Accounts payable $ 982.3 $ 566.2
Accrued expenses and other liabilities 1,143.0 933.3
Notes payable 4,886.9 3,989.0
---------- ----------
7,012.2 5,488.5
---------- ----------
Financial Services:
Accounts payable and other liabilities 58.8 24.7
Notes payable 1,191.7 387.8
---------- ----------
1,250.5 412.5
---------- ----------
8,262.7 5,901.0
---------- ----------
Minority interests 105.1 68.4
---------- ----------
STOCKHOLDERS' EQUITY
Common stock 3.2 3.2
Additional capital 1,658.4 1,693.3
Retained earnings 4,887.0 3,986.1
Treasury stock, at cost (95.7) (95.7)
---------- ----------
6,452.9 5,586.9
---------- ----------
$14,820.7 $11,556.3
========== ==========
D.R. HORTON, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
Fiscal Year Ended
September 30,
---------------------
2006 2007
---------- ----------
(In millions)
Operating Activities
Net income (loss) $ 1,233.3 $ (712.5)
Adjustments to reconcile net income (loss) to net
cash provided by (used in) operating activities:
Depreciation and amortization 56.5 64.4
Amortization of debt premiums, discounts and
fees 5.2 6.6
Stock option compensation expense 11.8 12.4
Income tax benefit from stock option exercises (9.4) (9.9)
Deferred income taxes (108.9) (489.0)
Loss on redemption of senior and senior
subordinated notes 13.4 12.1
Inventory impairments and land option cost
write-offs 270.9 1,329.5
Goodwill impairment -- 474.1
Changes in operating assets and liabilities:
(Increase) decrease in construction in progress
and finished homes (1,261.7) 657.8
(Increase) decrease in residential land and lots
-- developed, under development, and held for
development (1,847.3) 79.8
Decrease in earnest money deposits and other
assets 71.8 123.3
Decrease in mortgage loans held for sale 335.8 499.4
Increase (decrease) in accounts payable, accrued
expenses and other liabilities 37.8 (692.5)
---------- ----------
Net Cash (Used In) Provided By Operating
Activities (1,190.8) 1,355.5
---------- ----------
Investing Activities
Purchases of property and equipment (83.3) (39.8)
---------- ----------
Net Cash Used In Investing Activities (83.3) (39.8)
---------- ----------
Financing Activities
Proceeds from notes payable 5,824.2 2,980.0
Repayment of notes payable (4,711.4) (4,696.2)
(Increase) decrease in restricted cash (248.3) 248.3
Purchase of treasury stock (36.8) --
Proceeds from stock associated with certain
employee benefit plans 12.4 12.7
Income tax benefit from stock option exercises 9.4 9.9
Cash dividends paid (137.6) (188.4)
---------- ----------
Net Cash Provided By (Used In) Financing
Activities 711.9 (1,633.7)
---------- ----------
(Decrease) in Cash and Cash Equivalents (562.2) (318.0)
Cash and cash equivalents at beginning of year 1,149.8 587.6
---------- ----------
Cash and cash equivalents at end of year $ 587.6 $ 269.6
========== ==========
D.R. HORTON, INC.
($'s in millions)
NET SALES ORDERS
Three Months Ended September 30,
------------------------------------
2006 2007
---------------- ------------------
Homes Value Homes Value
------ --------- ------ -----------
Northeast 1,072 $ 251.9 558 $ 123.2
Midwest 994 286.4 481 141.1
Southeast 1,237 264.7 905 169.4
South
Central 3,504 615.6 2,542 441.4
Southwest 1,865 364.1 1,124 199.6
California 1,013 484.5 423 126.3
West 745 265.0 341 108.5
------ --------- ------ -----------
10,430 $2,532.2 6,374 $1,309.5
====== ========= ====== ===========
D.R. HORTON, INC.
($'s in millions)
NET SALES ORDERS
Fiscal Year Ended September 30,
--------------------------------
2006 2007
---------------- ---------------
Homes Value Homes Value
------ --------- ------ --------
Northeast 4,999 $ 1,233.5 3,085 $ 792.3
Midwest 5,007 1,471.3 3,065 887.0
Southeast 7,082 1,753.8 5,206 1,130.4
South
Central 14,682 2,536.4 9,740 1,723.5
Southwest 9,065 2,210.8 6,244 1,210.4
California 7,050 3,238.6 3,670 1,539.6
West 4,095 1,450.8 2,677 947.4
------ --------- ------ --------
51,980 $13,895.2 33,687 $8,230.6
====== ========= ====== ========
HOMES CLOSED
Three Months Ended September
30,
-----------------------------------
2006 2007
---------------- -----------------
Homes Value Homes Value
------ --------- ------ ----------
Northeast 1,931 $ 501.1 1,170 $ 301.7
Midwest 1,566 459.0 983 292.1
Southeast 2,432 612.9 1,659 378.3
South
Central 4,252 731.2 3,324 586.5
Southwest 3,049 707.1 2,486 572.3
California 2,615 1,206.7 1,283 553.0
West 1,416 484.7 828 284.3
------ --------- ------ ----------
17,261 $4,702.7 11,733 $2,968.2
====== ========= ====== ==========
HOMES CLOSED
Fiscal Year Ended September 30,
----------------------------------
2006 2007
----------------- ----------------
Homes Value Homes Value
------- --------- ------ ---------
Northeast 5,304 $ 1,392.9 4,119 $ 1,072.9
Midwest 6,050 1,761.7 3,502 1,037.1
Southeast 8,053 2,029.4 6,156 1,454.6
South
Central 13,444 2,282.9 11,260 2,005.2
Southwest 8,023 1,945.6 8,437 1,921.4
California 7,884 3,600.8 4,817 2,150.4
West 4,341 1,532.1 3,079 1,079.6
------- --------- ------ ---------
53,099 $14,545.4 41,370 $10,721.2
======= ========= ====== =========
SALES ORDER BACKLOG
As of September 30,
-------------------------------
2006 2007
--------------- ---------------
Homes Value Homes Value
------ -------- ------ --------
Northeast 2,228 $ 587.3 1,194 $ 306.6
Midwest 1,037 342.2 600 192.1
Southeast 2,148 633.8 1,198 309.6
South
Central 4,213 777.8 2,693 496.2
Southwest 5,391 1,417.5 3,198 706.5
California 2,088 1,041.7 941 430.9
West 1,020 384.8 618 252.5
------ -------- ------ --------
18,125 $5,185.1 10,442 $2,694.4
====== ======== ====== ========
CONTACT:
D.R. Horton, Inc.
Stacey Dwyer, EVP, 817-390-8200
SOURCE:
D.R. Horton, Inc.
