10-QPeriod: Q1 FY2002

HORTON D R INC /DE/ Quarterly Report for Q1 Ended Dec 31, 2001

Filed February 14, 2002For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) reported strong financial performance for the quarter ended December 31, 2001, with significant increases in both revenue and income compared to the prior year. Consolidated revenues grew by 30.7% to $1.16 billion, driven by robust homebuilding and expanding financial services segments. Income before income taxes saw a substantial increase of 53.9% to $117.5 million, reflecting improved operational efficiencies and higher profitability across its business lines. Key to this growth was a notable 29.9% increase in homebuilding revenues, supported by a 21.6% rise in net new sales contracts and a growing backlog, indicating strong demand for new homes. The company also experienced significant expansion in its financial services segment, with revenues nearly doubling, demonstrating successful cross-selling opportunities to its home buyers. DHI's financial position remains solid, with a growing stockholders' equity to total assets ratio and ample borrowing capacity, positioning the company well for continued growth and strategic initiatives, including a pending merger with Schuler Homes.

Key Highlights

  • 1Consolidated revenues increased by 30.7% to $1.16 billion for the three months ended December 31, 2001, compared to the prior year period.
  • 2Income before income taxes rose by 53.9% to $117.5 million, indicating improved profitability.
  • 3Homebuilding revenues grew by 29.9%, driven by a 21.6% increase in net new sales contracts and a 15.7% increase in the value of the sales contract backlog.
  • 4The financial services segment experienced significant growth, with revenues increasing by 76.6% to $24.9 million.
  • 5The company refinanced its revolving credit facility on January 31, 2002, increasing its capacity to $795 million.
  • 6Stockholders' equity as a percentage of total assets improved to 36.1% at December 31, 2001, from 34.2% at September 30, 2001.
  • 7D.R. Horton is progressing with its merger with Schuler Homes, Inc., with stockholder meetings scheduled for February 21, 2002.

Frequently Asked Questions

The primary driver of revenue growth was a significant increase in homebuilding revenues, fueled by strong housing demand and strategic acquisitions. The financial services segment also contributed substantially with a nearly doubling of its revenues, indicating successful integration and cross-selling.

D.R. Horton's liquidity appears robust, with $32.0 million in cash and cash equivalents at quarter-end and significant additional borrowing capacity under its credit facilities. The company recently refinanced its revolving credit facility to $795 million, maturing in January 2006, ensuring continued access to capital for its operations and growth strategies.

The merger with Schuler Homes, Inc. is actively progressing. Stockholder meetings to vote on the merger are scheduled for February 21, 2002. The company has outlined the estimated cash requirements for the transaction and has the financial capacity to manage potential repurchase obligations for Schuler's outstanding notes.

The financial services segment demonstrated strong performance, with revenues increasing by 76.6% to $24.9 million. This growth is attributed to the expansion of mortgage loan and title services offered to DHI's homebuilding customers and the impact of the Emerald Builders acquisition.