Forestar Reports Fiscal 2024 Third Quarter Results
Fiscal 2024 Third Quarter Highlights
All comparisons are year-over-year
-
Net income of
$38.7 million or$0.76 per diluted share -
Pre-tax income of
$51.6 million , with a pre-tax profit margin of 16.2% -
Consolidated revenues of
$318.4 million on 3,255 lots sold - Owned and controlled lots increased 40% to 102,100 lots
-
Return on equity expanded 190 basis points to 13.8% for the trailing twelve months ended
June 30, 2024 -
Book value per share increased 15% to
$29.87 - Net debt to total capital ratio of 18.7%
Financial Results
Net income for the third quarter of fiscal 2024 decreased 17% to
For the nine months ended
The Company’s return on equity was 13.8% for the trailing twelve months ended
Operational Results
Lots sold during the third quarter decreased 15% to 3,255 lots compared to 3,812 lots in the same quarter of fiscal 2023. During the third quarter of fiscal 2024, Forestar sold 352 lots to customers other than
Lots sold during the nine months ended
The Company’s lot position at
Capital Structure, Leverage and Liquidity
During the nine months ended
Forestar ended the quarter with
Outlook
“The supply of vacant developed lots, particularly at affordable price points, continues to be constrained across most of the country, and Forestar is uniquely positioned to take advantage of the shortage of finished lots for the homebuilding industry. Based on our fiscal year-to-date results and expectations for the fourth quarter, in fiscal 2024, we now expect to deliver between 14,600 and 15,100 lots compared to prior guidance of delivering between 14,500 and 15,500 lots. We still expect to generate
“We remain focused on growing our platform, turning our inventory, maximizing returns and consolidating market share in the highly fragmented lot development industry. Our contracted backlog, strong balance sheet and ample liquidity position us to continue gaining market share and invest in land opportunities to drive our future growth. We will maintain our disciplined approach to capital allocation to enhance the long-term value of Forestar.”
Conference Call and Webcast Details
The Company will host a conference call today (
About
Forward-Looking Statements
Portions of this document may constitute “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Although Forestar 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 Forestar on the date this release was issued. Forestar 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 the supply of vacant developed lots, particularly at affordable price points, continues to be constrained across most of the country; Forestar is uniquely positioned to take advantage of the shortage of finished lots for the homebuilding industry; in fiscal 2024, we now expect to deliver between 14,600 and 15,100 lots compared to prior guidance of delivering between 14,500 and 15,500 lots; and we still expect to generate
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: the effect of D.R. Horton’s controlling level of ownership on us and the holders of our securities; our ability to realize the potential benefits of the strategic relationship with
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Consolidated Balance Sheets |
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(Unaudited) |
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(In millions, except share data) |
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ASSETS |
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Cash and cash equivalents |
$ |
359.2 |
|
$ |
616.0 |
Real estate |
|
2,238.7 |
|
|
1,790.3 |
Investment in unconsolidated ventures |
|
0.3 |
|
|
0.5 |
Property and equipment, net |
|
6.5 |
|
|
5.9 |
Other assets |
|
70.3 |
|
|
58.0 |
Total assets |
$ |
2,675.0 |
|
$ |
2,470.7 |
LIABILITIES |
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Accounts payable |
$ |
70.9 |
|
$ |
68.4 |
Accrued development costs |
|
112.5 |
|
|
104.1 |
Earnest money on sales contracts |
|
163.8 |
|
|
121.4 |
Deferred tax liability, net |
|
52.8 |
|
|
50.7 |
Accrued expenses and other liabilities |
|
56.0 |
|
|
61.2 |
Debt |
|
706.1 |
|
|
695.0 |
Total liabilities |
|
1,162.1 |
|
|
1,100.8 |
EQUITY |
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Common stock, par value 50,607,995 and 49,903,713 shares issued and outstanding
at |
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50.6 |
|
|
49.9 |
Additional paid-in capital |
|
664.6 |
|
|
644.2 |
Retained earnings |
|
796.7 |
|
|
674.8 |
Stockholders' equity |
|
1,511.9 |
|
|
1,368.9 |
Noncontrolling interests |
|
1.0 |
|
|
1.0 |
Total equity |
|
1,512.9 |
|
|
1,369.9 |
Total liabilities and equity |
$ |
2,675.0 |
|
$ |
2,470.7 |
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Consolidated Statements of Operations |
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(Unaudited) |
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Three Months Ended
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Nine Months Ended
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2024 |
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2023 |
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2024 |
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2023 |
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(In millions, except per share amounts) |
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Revenues |
$ |
318.4 |
|
|
$ |
368.9 |
|
|
$ |
958.0 |
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|
$ |
887.1 |
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Cost of sales |
|
246.9 |
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|
|
283.9 |
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|
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730.6 |
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|
|
698.7 |
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Selling, general and administrative expense |
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29.3 |
|
|
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26.4 |
|
|
|
86.5 |
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|
|
71.3 |
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Gain on sale of assets |
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(5.0 |
) |
|
|
— |
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|
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(5.0 |
) |
|
|
(1.6 |
) |
Interest and other income |
|
(4.4 |
) |
|
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(3.8 |
) |
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(15.7 |
) |
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(7.5 |
) |
Income before income taxes |
|
51.6 |
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|
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62.4 |
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|
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161.6 |
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|
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126.2 |
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Income tax expense |
|
12.9 |
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|
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15.6 |
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|
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39.8 |
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|
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31.7 |
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Net income |
$ |
38.7 |
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$ |
46.8 |
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$ |
121.8 |
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$ |
94.5 |
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Basic net income per common share |
$ |
0.76 |
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$ |
0.94 |
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$ |
2.42 |
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|
$ |
1.89 |
|
Weighted average number of common shares |
|
50.8 |
|
|
|
50.1 |
|
|
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50.3 |
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|
|
50.0 |
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Diluted net income per common share |
$ |
0.76 |
|
|
$ |
0.93 |
|
|
$ |
2.40 |
|
|
$ |
1.89 |
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Adjusted weighted average number of common shares |
|
51.1 |
|
|
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50.2 |
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|
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50.7 |
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|
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50.0 |
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Revenues, Residential Lots Sold and Lot Position |
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REVENUES |
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Three Months Ended |
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Nine Months Ended |
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2024 |
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2023 |
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2024 |
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2023 |
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(In millions) |
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Residential lot sales: |
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Development projects |
$ |
295.7 |
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$ |
334.2 |
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$ |
922.3 |
|
$ |
790.3 |
Lot banking projects |
|
10.3 |
|
|
|
— |
|
|
11.0 |
|
|
— |
(Increase) decrease in contract liabilities |
|
(0.2 |
) |
|
|
0.6 |
|
|
2.6 |
|
|
4.0 |
|
|
305.8 |
|
|
|
334.8 |
|
|
935.9 |
|
|
794.3 |
Deferred development projects |
|
0.5 |
|
|
|
10.3 |
|
|
3.5 |
|
|
24.6 |
|
|
306.3 |
|
|
|
345.1 |
|
|
939.4 |
|
|
818.9 |
Tract sales and other |
|
12.1 |
|
|
|
23.8 |
|
|
18.6 |
|
|
68.2 |
Total revenues |
$ |
318.4 |
|
|
$ |
368.9 |
|
$ |
958.0 |
|
$ |
887.1 |
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RESIDENTIAL LOTS SOLD |
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Three Months Ended |
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Nine Months Ended |
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|
|
2024 |
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2023 |
|
|
2024 |
|
|
2023 |
Development projects |
|
3,163 |
|
|
|
3,812 |
|
|
9,593 |
|
|
9,054 |
Lot banking projects |
|
92 |
|
|
|
— |
|
|
101 |
|
|
— |
|
|
3,255 |
|
|
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3,812 |
|
|
9,694 |
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9,054 |
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Average sales price per lot (1) |
$ |
94,000 |
|
|
$ |
87,700 |
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$ |
96,300 |
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$ |
87,300 |
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LOT POSITION |
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Lots owned |
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57,900 |
|
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52,400 |
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Lots controlled under land and lot purchase contracts |
|
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44,200 |
|
|
26,800 |
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Total lots owned and controlled |
|
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102,100 |
|
|
79,200 |
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Owned lots under contract to sell to |
|
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19,500 |
|
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14,400 |
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Owned lots under contract to customers other than |
|
|
900 |
|
|
600 |
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Total owned lots under contract |
|
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20,400 |
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15,000 |
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Owned lots subject to right of first offer with |
|
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16,700 |
|
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17,000 |
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Owned lots fully developed |
|
|
5,900 |
|
|
6,400 |
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Owned lots fully developed related to lot banking |
|
|
300 |
|
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— |
_____________
(1) |
Excludes any impact from change in contract liabilities. |
View source version on businesswire.com: https://www.businesswire.com/news/home/20240718111623/en/
Vice President of Finance & Investor Relations
InvestorRelations@forestar.com
Source: