D.R. Horton Loses $142M in its Fiscal Third Quarter But Has $1.97B Cash on Hand

FORT WORTH, TX—D.R. Horton Inc., the largest homebuilder in the U.S., lost $142.3 million in its third fiscal quarter that ended June 30, but the Fort Worth, TX-based company still has $1.97 billion in cash on hand.

In an online conference with industry analysts today, company chairman Donald R. Horton (top right photo) said, “Our net sales orders in the June quarter reflected a 22% sequential increase from our March quarter which was stronger than our usual seasonal trend.

“However, market conditions in the homebuilding industry are still challenging, characterized by rising foreclosures, high inventory levels of available homes, increasing unemployment, tight credit for homebuyers and weak consumer confidence.

“We have continued to adjust our business to the current homebuilding environment by reducing our owned lot position and completed specs, controlling costs and strengthening our balance sheet.”

Horton adds, “We have generated positive cash flow from operations in each of the past 12 quarters, and our unrestricted homebuilding cash balance was $1.97 billion at June 30, 2009.

“Our net homebuilding debt to total capitalization was 34.5% at the end of the quarter, and we will continue to focus on maintaining our strong liquidity position and balance sheet.”

The third quarter loss equates to a loss of 45 cents per diluted share.

The quarterly results included $110.8 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, Horton says.

The net loss for the same quarter of fiscal 2008 was $399.3 million, or $1.26 per diluted share.

Homebuilding revenue for the third quarter of fiscal 2009 totaled $914.1 million, compared to $1.4 billion in the same quarter of fiscal 2008.

Homes closed totaled 4,240 homes, compared to 6,167 homes in the year ago quarter.

For the nine months ended June 30, 2009, the Company reported a net loss of $313.4 million, or $0.99 per diluted share.

The company’s sales order backlog of homes under contract at June 30, 2009 was 5,430 homes ($1.1 billion), compared to 8,281 homes ($1.9 billion) at June 30, 2008.

Net sales orders for the third quarter totaled 5,089 homes ($1.1 billion), compared to 5,501 homes ($1.2 billion) for the same quarter of fiscal 2008.

The company’s cancellation rate (cancelled sales orders divided by gross sales orders) for the third quarter of fiscal 2009 was 26%. Net sales orders for the first nine months of fiscal 2009 were 12,026 homes ($2.5 billion), compared to 17,274 homes ($3.8 billion) for the same period of fiscal 2008.

The company has declared a quarterly cash dividend of $0.0375 per share. The dividend is payable on Aug. 28, 2009 to stockholders of record on Aug. 19, 2009.

D.R. Horton delivered more than 26,000 homes in its fiscal year ended Sept. 30, 2008.
Founded in 1978, D.R. Horton has operations in 76 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.