10-QPeriod: Q3 FY2003

HORTON D R INC /DE/ Quarterly Report for Q3 Ended Jun 30, 2003

Filed August 14, 2003For Securities:DHI

Summary

D.R. Horton, Inc. (DHI) reported strong financial results for the third quarter of fiscal year 2003, with significant year-over-year increases in both revenue and income. Total revenues rose by 22.3% to $2.21 billion, driven by robust performance in its homebuilding and financial services segments. Income before income taxes saw a substantial increase of 48.0% to $250.9 million. This growth reflects continued strong housing demand across most of the company's markets and the positive impact of its financial services operations. The company's homebuilding segment experienced a 21.8% revenue increase, with a notable rise in the number of homes closed and an increase in the average selling price. Net new sales orders also surged by 28.7%, indicating a healthy backlog and strong future revenue potential. The financial services segment demonstrated impressive growth, with revenues up 58.0%, driven by expanded mortgage and title services. Financially, DHI maintained a solid balance sheet, with cash and cash equivalents increasing significantly. The company also successfully managed its debt, issuing new senior notes and redeeming older ones. The positive operational performance and strategic financial management position D.R. Horton favorably in the current housing market.

Key Highlights

  • 1Total revenues increased by 22.3% year-over-year to $2.21 billion for the third quarter.
  • 2Income before income taxes grew by 48.0% to $250.9 million, demonstrating strong profitability.
  • 3Homebuilding revenues rose 21.8% to $2.17 billion, with 9,005 homes closed, up from 7,877 in the prior year period.
  • 4The average selling price of homes closed increased by 5.4% to $234,200.
  • 5Net new sales orders increased by 28.7% in value, indicating strong future demand and a growing backlog of $4.03 billion.
  • 6Financial services revenues saw a significant 58.0% increase to $45.6 million, driven by expansion in mortgage and title services.
  • 7The company ended the quarter with $296.2 million in cash and cash equivalents, a substantial increase from the prior year.

Frequently Asked Questions

Revenue growth was driven by increased demand in the homebuilding segment, leading to higher home sales volumes and an increased average selling price. The financial services segment also contributed significantly with expanded mortgage origination and title services.

D.R. Horton issued new senior notes (6.875% due 2013 and 5.875% due 2013) and used the proceeds to redeem older, higher-interest debt. Additionally, all zero-coupon convertible senior notes were converted into common stock, reducing the company's debt.

The significant increase in net new sales orders (28.7%) and the substantial growth in the sales backlog (36.6% to $4.03 billion) suggest a strong pipeline of future business and indicate a positive outlook for continued revenue growth in upcoming quarters.

The financial services segment is growing rapidly, with revenues increasing by 58.0% year-over-year. While homebuilding remains the core business (approximately 98% of revenues), the financial services segment is showing strong complementary growth and increasing its contribution.