10-QPeriod: Q3 FY2001

HORTON D R INC /DE/ Quarterly Report for Q3 Ended Jun 30, 2001

Filed August 14, 2001For Securities:DHI

Summary

D.R. Horton, Inc. reported strong financial performance for the third quarter and first nine months of fiscal year 2001, with significant increases in revenues and income before taxes across both its homebuilding and financial services segments. The homebuilding segment saw robust growth driven by higher average selling prices and increased volumes, alongside a substantial rise in sales contract backlog, indicating sustained demand. The financial services segment also demonstrated considerable revenue growth. The company continues to expand its operations through strategic acquisitions, complementing organic growth. Financially, DHI managed its leverage effectively, supported by new debt issuances and retained earnings, while maintaining adequate liquidity. Key financial developments include the issuance of Zero Coupon Convertible Senior Notes, which strengthened the balance sheet and provided flexibility for future growth and acquisitions. The company is also actively managing its debt structure and exploring refinancing options. Despite increased inventories to support growth, D.R. Horton remains focused on profitability and operational efficiency, with improvements noted in gross profit margins and SG&A as a percentage of revenue. The company is well-positioned for continued expansion and market leadership.

Key Highlights

  • 1Consolidated revenues increased by 16.9% to $1.12 billion for the third quarter of FY2001 compared to the prior year period.
  • 2Income before income taxes rose by 42.0% to $110.1 million for the third quarter of FY2001 compared to the prior year period.
  • 3Home sales revenue grew significantly due to strong demand, increased average selling prices, and higher volumes, with a notable 7.3% increase in the average selling price of homes closed in Q3 FY2001.
  • 4The sales contract backlog increased by 42.9% to $2.26 billion as of June 30, 2001, indicating strong future revenue potential.
  • 5The financial services segment experienced robust revenue growth of 48.6% in the third quarter of FY2001, driven by increased mortgage and title services.
  • 6The company issued $381.1 million in Zero Coupon Convertible Senior Notes in May 2001 to enhance its financial flexibility.
  • 7Two strategic acquisitions were completed: Fortress-Florida, Inc. in May 2001 and Emerald Builders in July 2001, to expand market presence.

Frequently Asked Questions

D.R. Horton reported strong performance with consolidated revenues increasing by 16.9% to $1.12 billion and income before income taxes rising by 42.0% to $110.1 million compared to the same period in the prior year. This growth was driven by both the homebuilding and financial services segments.

The homebuilding segment saw a 16.4% increase in revenues to $1.102 billion, driven by higher home sales volumes and a 7.3% increase in the average selling price of homes closed. The company also experienced a significant 42.9% increase in its sales contract backlog, signaling strong future demand.

At June 30, 2001, D.R. Horton had $81.4 million in cash and cash equivalents. The company increased its leverage slightly to support business expansion and acquisitions. It has an $825 million unsecured revolving credit facility and is in negotiations to refinance existing facilities. The issuance of $381.1 million in convertible notes in May 2001 further strengthened its financial position.

Yes, D.R. Horton acquired Fortress-Florida, Inc. in May 2001 and Emerald Builders in July 2001, indicating a strategy of growth through acquisition to expand its market reach. The company also filed a universal shelf registration statement, allowing for up to $750 million in potential future capital raises.