FORT WORTH, Texas, May 6, 2008 (PRIME NEWSWIRE) -- D.R. Horton, Inc. (NYSE:DHI), America's Builder, today reported a net loss for its second fiscal quarter ended March 31, 2008 of $1.3 billion or $4.14 per diluted share. The quarterly results included $834.1 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. Net income for the same quarter of fiscal 2007 was $51.7 million or $0.16 per diluted share. Homebuilding revenue for the second quarter of fiscal 2008 totaled $1.6 billion, compared to $2.6 billion in the same quarter of fiscal 2007. Homes closed in the current quarter totaled 6,719, compared to 9,792 homes closed in the year ago quarter.
For the six months ended March 31, 2008, the Company reported a net loss totaling $1.4 billion, or $4.55 per diluted share. The six-month results included pre-tax charges to cost of sales of $1.1 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. Net income for the six months ended March 31, 2007 totaled $161.4 million or $0.51 per diluted share. Homebuilding revenue for the six months ended March 31, 2008 totaled $3.3 billion, compared to $5.4 billion for the same period of fiscal 2007. Homes closed in the six-month period totaled 13,268, compared to 19,994 homes closed in the same period of fiscal 2007.
During the three months ended March 31, 2008, the Company recorded a valuation allowance of $714.3 million against its deferred tax assets, of which $385.0 million relates to the deferred tax assets existing as of the beginning of the fiscal year, and the remainder represents a valuation allowance for deferred tax assets created during the six months ended March 31, 2008. The deferred tax asset valuation allowance is included in income tax expense for the three and six-month periods ended March 31, 2008.
The Company's sales backlog of homes under contract at March 31, 2008 was 8,947 homes ($2.1 billion), compared to 16,885 homes ($4.8 billion) at March 31, 2007. Net sales orders for the second quarter ended March 31, 2008 totaled 7,528 homes ($1.7 billion), compared to 9,983 homes ($2.6 billion) for the same quarter of fiscal 2007. The Company's cancellation rate (cancelled sales orders divided by gross sales orders) for the second quarter of fiscal 2008 was 33%. Net sales orders for the first six months of fiscal 2008 were 11,773 homes ($2.6 billion), compared to 18,754 homes ($4.9 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 inventory and generating cash flow from operations. We reduced our homes in residential inventory to approximately 15,100 homes at the end of March, down approximately 13% from the end of December. We generated approximately $450 million of cash flow from operations this quarter and exceeded our fiscal year goal of at least $1 billion in only six months. We ended the quarter with a homebuilding cash balance of $519 million. We also maintained our focus on controlling our costs, reducing our homebuilding SG&A expenses by approximately $88 million in our quarter ended March 31, 2008, compared to the year ago quarter."
The Company will host a conference call today (Tuesday, May 6th) 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 May 29, 2008 to stockholders of record on May 19, 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 82 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.
The D.R. Horton, Inc. logo is available at http://www.primenewswire.com/newsroom/prs/?pkgid=4317
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 and maintaining our focus on controlling costs. 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; competitive conditions within our industry; the availability of capital; our ability to effect any future growth strategies successfully; 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 Six months ended
March 31, March 31,
--------------------- ---------------------
2008 2007 2008 2007
--------- --------- --------- ---------
(In millions, except per share data)
Homebuilding:
Revenues:
Home sales $ 1,597.8 $ 2,521.5 $ 3,204.8 $ 5,282.6
Land/lot sales 26.2 94.7 126.8 135.1
--------- --------- --------- ---------
1,624.0 2,616.2 3,331.6 5,417.7
--------- --------- --------- ---------
Cost of sales:
Home sales 1,447.5 2,074.4 2,825.4 4,321.3
Land/lot sales 21.2 89.1 103.9 122.1
Inventory impairments
and land option cost
write-offs 834.1 81.2 1,079.5 158.8
--------- --------- --------- ---------
2,302.8 2,244.7 4,008.8 4,602.2
--------- --------- --------- ---------
Gross profit (loss):
Home sales 150.3 447.1 379.4 961.3
Land/lot sales 5.0 5.6 22.9 13.0
Inventory impairments
and land option cost
write-offs (834.1) (81.2) (1,079.5) (158.8)
--------- --------- --------- ---------
(678.8) 371.5 (677.2) 815.5
--------- --------- --------- ---------
Selling, general and
administrative
expense 208.3 296.0 421.4 591.3
Interest expense 11.2 -- 11.2 --
Other (income) (1.8) (0.6) (3.5) (1.7)
--------- --------- --------- ---------
Operating income
(loss) from
Homebuilding (896.5) 76.1 (1,106.3) 225.9
--------- --------- --------- ---------
Financial Services:
Revenues 32.9 41.9 67.9 108.4
General and
administrative expense 22.8 38.4 53.3 83.4
Interest expense 0.8 6.8 2.1 16.4
Interest and other
(income) (2.6) (10.6) (6.3) (25.9)
--------- --------- --------- ---------
Operating income from
Financial Services 11.9 7.3 18.8 34.5
--------- --------- --------- ---------
Income (loss) before
income taxes (884.6) 83.4 (1,087.5) 260.4
Provision for income
taxes 421.0 31.7 347.0 99.0
--------- --------- --------- ---------
Net income (loss) $(1,305.6) $ 51.7 $(1,434.5) $ 161.4
========= ========= ========= =========
Basic:
Net income (loss) per
share $ (4.14) $ 0.16 $ (4.55) $ 0.51
========= ========= ========= =========
Weighted average
number of common
shares 315.4 313.9 315.2 313.7
========= ========= ========= =========
Diluted:
Net income (loss)
per share $ (4.14) $ 0.16 $ (4.55) $ 0.51
========= ========= ========= =========
Weighted average
number of common
shares 315.4 316.1 315.2 315.8
========= ========= ========= =========
Other Consolidated
Financial Data:
Interest amortized to
home and land/lot
cost of sales $ 75.2 $ 54.4 $ 133.2 $ 107.5
========= ========= ========= =========
Depreciation and
amortization $ 14.2 $ 16.3 $ 29.1 $ 32.0
========= ========= ========= =========
Interest incurred $ 58.7 $ 85.2 $ 121.6 $ 172.9
========= ========= ========= =========
D.R. HORTON, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
March 31, Sept. 30,
2008 2007
----------- -----------
ASSETS (In millions)
Homebuilding:
Cash and cash equivalents $ 518.9 $ 228.3
Inventories:
Construction in progress and finished homes 2,200.1 3,346.8
Residential land and lots - developed and
under development 4,049.8 5,334.7
Land held for development 721.5 540.1
Land inventory not owned 94.0 121.9
----------- -----------
7,065.4 9,343.5
Property and equipment, net 88.9 110.2
Deferred income taxes, net 545.5 863.8
Earnest money deposits and other assets 238.9 291.2
Goodwill 95.3 95.3
----------- -----------
8,552.9 10,932.3
----------- -----------
Financial Services:
Cash and cash equivalents 42.0 41.3
Mortgage loans held for sale 307.1 523.5
Other assets 53.2 59.2
----------- -----------
402.3 624.0
----------- -----------
$ 8,955.2 $ 11,556.3
=========== ===========
LIABILITIES
Homebuilding:
Accounts payable $ 290.4 $ 566.2
Accrued expenses and other liabilities 793.7 933.3
Notes payable 3,580.8 3,989.0
----------- -----------
4,664.9 5,488.5
----------- -----------
Financial Services:
Accounts payable and other liabilities 19.2 24.7
Notes payable 164.0 387.8
----------- -----------
183.2 412.5
----------- -----------
4,848.1 5,901.0
----------- -----------
Minority interests 34.3 68.4
----------- -----------
STOCKHOLDERS' EQUITY
Common stock 3.2 3.2
Additional capital 1,708.2 1,693.3
Retained earnings 2,457.1 3,986.1
Treasury stock, at cost (95.7) (95.7)
----------- -----------
4,072.8 5,586.9
----------- -----------
$ 8,955.2 $ 11,556.3
=========== ===========
D.R. HORTON, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
Six Months
Ended
March 31,
2008
----------
(In millions)
Operating Activities
Net loss $ (1,434.5)
Adjustments to reconcile net loss to net cash
provided by operating activities:
Depreciation and amortization 29.1
Amortization of debt discounts and fees 3.5
Stock option compensation expense 5.7
Income tax benefit from stock option exercises (2.0)
Deferred income taxes 318.3
Inventory impairments and land option cost write-offs 1,079.5
Changes in operating assets and liabilities:
Decrease in construction in progress and finished
homes 923.9
Decrease in residential land and lots -- developed,
under development, and held for development 253.8
Decrease in earnest money deposits and other assets 44.1
Decrease in mortgage loans held for sale 216.4
Decrease in accounts payable, accrued expenses and
other liabilities (427.8)
----------
Net cash provided by operating activities 1,010.0
----------
Investing Activities
Purchases of property and equipment (6.8)
----------
Net cash used in investing activities (6.8)
----------
Financing Activities
Proceeds from notes payable 282.0
Repayment of notes payable (907.8)
Proceeds from stock associated with certain employee
benefit plans 6.4
Income tax benefit from stock option exercises 2.0
Cash dividends paid (94.5)
----------
Net cash used in financing activities (711.9)
----------
Increase in Cash and Cash Equivalents 291.3
Cash and cash equivalents at beginning of period 269.6
----------
Cash and cash equivalents at end of period $ 560.9
==========
D.R. HORTON, INC.
($'s in millions)
NET SALES ORDERS
Three Months Ended March 31,
-----------------------------------------
2008 2007
------------------- -------------------
Homes Value Homes Value
-------- -------- -------- --------
Northeast 509 $ 131.5 1,021 $ 265.1
Midwest 442 129.8 1,033 296.2
Southeast 1,164 228.3 1,429 315.7
South Central 2,407 426.3 2,734 490.2
Southwest 1,346 249.7 1,681 347.7
California 1,120 335.1 1,107 533.5
West 540 161.3 978 350.9
-------- -------- -------- --------
7,528 $1,662.0 9,983 $2,599.3
======== ======== ======== ========
Six Months Ended March 31,
-----------------------------------------
2008 2007
------------------- -------------------
Homes Value Homes Value
-------- -------- -------- --------
Northeast 853 $ 220.3 1,810 $ 477.4
Midwest 739 210.5 1,873 532.0
Southeast 1,745 336.1 2,801 637.3
South Central 3,992 703.7 4,657 838.7
Southwest 2,098 392.8 3,506 698.7
California 1,491 461.0 2,443 1,106.2
West 855 263.7 1,664 601.9
-------- -------- -------- --------
11,773 $2,588.1 18,754 $4,892.2
======== ======== ======== ========
HOMES CLOSED
Three Months Ended March 31,
-----------------------------------------
2008 2007
------------------- -------------------
Homes Value Homes Value
-------- -------- -------- --------
Northeast 597 $ 153.1 1,029 $ 264.4
Midwest 422 127.5 797 227.9
Southeast 955 202.4 1,433 343.3
South Central 2,059 362.8 2,668 477.4
Southwest 1,315 269.8 2,092 472.7
California 829 311.0 1,038 476.7
West 542 171.2 735 259.1
-------- -------- -------- --------
6,719 $1,597.8 9,792 $2,521.5
======== ======== ======== ========
Six Months Ended March 31,
-----------------------------------------
2008 2007
------------------- -------------------
Homes Value Homes Value
-------- -------- -------- --------
Northeast 1,197 $ 311.1 2,030 $ 524.1
Midwest 945 284.0 1,745 509.3
Southeast 1,885 414.3 2,922 708.7
South Central 3,963 707.4 5,190 927.9
Southwest 2,824 601.7 3,942 899.2
California 1,496 569.5 2,621 1,172.3
West 958 316.8 1,544 541.1
-------- -------- -------- --------
13,268 $3,204.8 19,994 $5,282.6
======== ======== ======== ========
SALES ORDER BACKLOG
As of March 31,
-----------------------------------------
2008 2007
------------------- -------------------
Homes Value Homes Value
-------- -------- -------- --------
Northeast 850 $ 215.9 2,008 $ 540.6
Midwest 394 118.6 1,165 364.8
Southeast 1,058 231.4 2,027 562.5
South Central 2,722 492.5 3,680 688.6
Southwest 2,472 497.6 4,955 1,217.2
California 936 322.3 1,910 975.5
West 515 199.5 1,140 445.5
-------- -------- -------- --------
8,947 $2,077.8 16,885 $4,794.7
======== ======== ======== ========