ATLANTA, April 21, 2016 /PRNewswire/ -- PulteGroup, Inc.
(NYSE: PHM) announced today financial results for its first quarter
ended March 31, 2016. For the
quarter, the Company reported net income of $83 million, or $0.24 per share, compared with prior year net
income of $55 million, or
$0.15 per share.
"PulteGroup has gotten off to a strong start in 2016, with
increased investment driving growth in the business as the value of
net new orders increased 24% to $2.1
billion and our backlog expanded by 31% to $3.4 billion," said Richard J. Dugas, Jr., Chairman and CEO of
PulteGroup. "We continued to deliver strong margin
performance through our focus on better community locations,
strategic pricing and construction efficiencies, while enhancing
our overall liquidity and maintaining a superior balance sheet that
gives us the flexibility to capitalize on market opportunities as
they develop."
"Looking to the broader housing market, we remain pleased with
overall demand and expect new home sales will continue to move
higher over the coming years as the industry benefits from an
improving economy, ongoing employment and wage gains, low interest
rates, a limited supply of homes and the gradual release of pent-up
demand," added Dugas. "We believe our business is extremely well
positioned to be successful in this type of operating environment
given our disciplined investment practices and focus on investing
in high returning projects."
Home sale revenues for the first quarter were $1.4 billion, an increase of 28% over the prior
year. Higher revenues for the quarter were driven by a 17%
increase in closings to 3,945 homes in combination with a 9%
increase in average selling price to $353,000.
Home sale gross margin for the quarter was 21.9%, in line with
Company guidance. Margins for the period were reduced by
approximately 80 basis points associated with the Company's recent
purchase of substantially all of the assets of John Wieland Homes and Neighborhoods.
Homebuilding SG&A expense for the period was $191 million, or 13.7% of home sale revenues,
compared with $161 million, or 14.8%
of home sale revenues, in the prior year.
"Our SG&A increased due to our investment in the incremental
workforce necessary to manage the 41% increase in homes we have
under construction and the $4 million
of transaction costs associated with the Wieland transaction, but
has importantly decreased 110 basis points as a percentage of
revenue as we gained overhead leverage due to the increase in our
deliveries this quarter," said Bob
O'Shaughnessy, Executive Vice President and CFO. "We
expect a slight decline in our quarterly SG&A spend through the
balance of 2016, and currently project our full year SG&A to be
approximately $730 million, or
approximately 10% of our revenues."
For the quarter, the dollar value of net new orders increased
24% over the prior year to $2.1
billion, while net new orders increased 10% to 5,652
homes. For the quarter, the Company operated out of 709
communities, which represents an increase of 16% over last
year. Community count for the quarter included 49 communities
acquired as part of the Wieland transaction. Excluding the
acquired Wieland communities, absorption paces in the first quarter
were comparable with the prior year quarter.
PulteGroup's backlog at quarter end totaled 8,755 homes valued
at $3.4 billion, compared with prior
year backlog of 7,624 homes valued at $2.6
billion. The average sales price in backlog of
$384,000, which is up 14% over the
prior year, reflects the ongoing shift in the mix of homes sold
toward more move-up product, as well as the inclusion of luxury
homes offered in Wieland communities.
Benefitting from increased closing volumes, the Company's
financial services operations reported pretax income of
$10 million for the quarter, compared
with pretax income of $5 million in
the prior year. Mortgage capture rate for the quarter was 81%
compared with 82% in the comparable prior year period.
The Company's reported income tax expense of $35 million, which represents an effective tax
rate of 29.5%, includes a reduction of approximately
$10 million relating to the favorable
resolution of certain state income matters. The Company
currently estimates that its normalized tax rate for future
quarters will be in line with its previous guidance of 38%.
The Company ended the quarter with $1.0
billion of cash, of which $465
million will be used to retire bonds maturing in May
2016. On a pro forma basis, adjusting for the repayment of
these bonds, the Company's debt-to-total capital ratio falls to
35%, down from the 39% currently reported.
During the quarter, the Company repurchased 3.1 million common
shares for $50 million, or an average
price of $16.36 per share.
A conference call discussing PulteGroup's first quarter results
is scheduled for Thursday, April 21,
2016, at 8:30 a.m. Eastern
Time. Interested investors can access the live webcast
via PulteGroup's corporate website at www.pultegroupinc.com.
Forward-Looking Statements
This press release includes "forward-looking statements."
These statements are subject to a number of risks, uncertainties
and other factors that could cause our actual results, performance,
prospects or opportunities, as well as those of the markets we
serve or intend to serve, to differ materially from those expressed
in, or implied by, these statements. You can identify these
statements by the fact that they do not relate to matters of a
strictly factual or historical nature and generally discuss or
relate to forecasts, estimates or other expectations regarding
future events. Generally, the words "believe," "expect,"
"intend," "estimate," "anticipate," "project," "may," "can,"
"could," "might," "will" and similar expressions identify
forward-looking statements, including statements related to
expected operating and performing results, planned transactions,
planned objectives of management, future developments or conditions
in the industries in which we participate and other trends,
developments and uncertainties that may affect our business in the
future.
Such risks, uncertainties and other factors include, among other
things: interest rate changes and the availability of mortgage
financing; continued volatility in the debt and equity markets;
competition within the industries in which PulteGroup operates; the
availability and cost of land and other raw materials used by
PulteGroup in its homebuilding operations; the impact of any
changes to our strategy in responding to the cyclical nature of the
industry, including any changes regarding our land positions; the
availability and cost of insurance covering risks associated with
PulteGroup's businesses; shortages and the cost of labor; weather
related slowdowns; slow growth initiatives and/or local building
moratoria; governmental regulation directed at or affecting the
housing market, the homebuilding industry or construction
activities; uncertainty in the mortgage lending industry, including
revisions to underwriting standards and repurchase requirements
associated with the sale of mortgage loans; the interpretation of
or changes to tax, labor and environmental laws; economic changes
nationally or in PulteGroup's local markets, including inflation,
deflation, changes in consumer confidence and preferences and the
state of the market for homes in general; legal or regulatory
proceedings or claims; our ability to generate sufficient cash flow
in order to successfully implement our capital allocation
priorities; required accounting changes; terrorist acts and other
acts of war; and other factors of national, regional and global
scale, including those of a political, economic, business and
competitive nature. See PulteGroup's Annual Report on Form
10-K for the fiscal year ended December 31,
2015, and other public filings with the Securities and
Exchange Commission (the "SEC") for a further discussion of these
and other risks and uncertainties applicable to our
businesses. PulteGroup undertakes no duty to update any
forward-looking statement, whether as a result of new information,
future events or changes in PulteGroup's expectations.
About PulteGroup
PulteGroup, Inc. (NYSE: PHM), based in Atlanta, Georgia, is one of America's largest
homebuilding companies with operations in approximately 50 markets
throughout the country. Through its brand portfolio that includes
Centex, Pulte Homes, Del Webb,
DiVosta Homes and John Wieland Homes
and Neighborhoods, the Company is one of the industry's most
versatile homebuilders able to meet the needs of multiple buyer
groups and respond to changing consumer demand. PulteGroup conducts
extensive research to provide homebuyers with innovative solutions
and consumer inspired homes and communities to make lives
better.
For more information about PulteGroup, Inc. and PulteGroup
brands, go to www.pultegroupinc.com; www.pulte.com; www.centex.com;
www.delwebb.com; www.divosta.com and www.jwhomes.com.
PulteGroup,
Inc.
Consolidated
Results of Operations
($000's omitted,
except per share data)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
Revenues:
|
|
|
|
Homebuilding
|
|
|
|
Home sale
revenues
|
$
|
1,394,243
|
|
|
$
|
1,088,158
|
|
Land sale
revenues
|
2,487
|
|
|
17,542
|
|
|
1,396,730
|
|
|
1,105,700
|
|
Financial
Services
|
35,848
|
|
|
27,598
|
|
Total
revenues
|
1,432,578
|
|
|
1,133,298
|
|
|
|
|
|
Homebuilding Cost
of Revenues:
|
|
|
|
Home sale cost of
revenues
|
1,089,329
|
|
|
841,145
|
|
Land sale cost of
revenues
|
2,028
|
|
|
13,378
|
|
|
1,091,357
|
|
|
854,523
|
|
Financial Services
expenses
|
26,119
|
|
|
22,541
|
|
Selling, general,
and administrative expenses
|
191,015
|
|
|
161,312
|
|
Other expense
(income), net
|
5,874
|
|
|
(883)
|
|
Income before
income taxes
|
118,213
|
|
|
95,805
|
|
Income tax
expense
|
34,913
|
|
|
40,834
|
|
Net
income
|
$
|
83,300
|
|
|
$
|
54,971
|
|
|
|
|
|
Per
share:
|
|
|
|
Basic
earnings
|
$
|
0.24
|
|
|
$
|
0.15
|
|
Diluted
earnings
|
$
|
0.24
|
|
|
$
|
0.15
|
|
Cash dividends
declared
|
$
|
0.09
|
|
|
$
|
0.08
|
|
|
|
|
|
Number of shares
used in calculation:
|
|
|
|
Basic
|
347,815
|
|
|
366,748
|
|
Effect of dilutive
securities
|
2,662
|
|
|
3,362
|
|
Diluted
|
350,477
|
|
|
370,110
|
|
PulteGroup,
Inc.
Condensed
Consolidated Balance Sheets
($000's
omitted)
(Unaudited)
|
|
March 31,
2016
|
|
December 31,
2015
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
Cash and
equivalents
|
$
|
995,696
|
|
|
$
|
754,161
|
|
Restricted
cash
|
22,419
|
|
|
21,274
|
|
House and land
inventory
|
6,202,479
|
|
|
5,450,058
|
|
Land held for
sale
|
85,017
|
|
|
81,492
|
|
Residential mortgage
loans available-for-sale
|
290,578
|
|
|
442,715
|
|
Investments in
unconsolidated entities
|
53,090
|
|
|
41,267
|
|
Other
assets
|
686,163
|
|
|
660,835
|
|
Intangible
assets
|
163,185
|
|
|
110,215
|
|
Deferred tax assets,
net
|
1,344,853
|
|
|
1,394,879
|
|
|
$
|
9,843,480
|
|
|
$
|
8,956,896
|
|
|
|
|
|
LIABILITIES AND
SHAREHOLDERS' EQUITY
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
Accounts
payable
|
$
|
331,932
|
|
|
$
|
327,725
|
|
Customer
deposits
|
223,692
|
|
|
186,141
|
|
Accrued and other
liabilities
|
1,294,892
|
|
|
1,284,273
|
|
Income tax
liabilities
|
33,460
|
|
|
57,050
|
|
Financial Services
debt
|
118,614
|
|
|
267,877
|
|
Term loan
|
498,817
|
|
|
498,423
|
|
Senior
notes
|
2,568,546
|
|
|
1,576,082
|
|
|
5,069,953
|
|
|
4,197,571
|
|
Shareholders'
equity
|
4,773,527
|
|
|
4,759,325
|
|
|
$
|
9,843,480
|
|
|
$
|
8,956,896
|
|
PulteGroup,
Inc.
Consolidated
Statements of Cash Flows
($000's
omitted)
(Unaudited)
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
Cash flows from
operating activities:
|
|
|
|
Net income
|
$
|
83,300
|
|
|
$
|
54,971
|
|
Adjustments to
reconcile net income to net cash from operating
activities:
|
|
|
|
Deferred income tax
expense
|
50,026
|
|
|
40,805
|
|
Depreciation and
amortization
|
13,113
|
|
|
11,062
|
|
Share-based
compensation expense
|
9,355
|
|
|
8,280
|
|
Other, net
|
4,447
|
|
|
4,810
|
|
Increase (decrease)
in cash due to:
|
|
|
|
Restricted
cash
|
(1,145)
|
|
|
(1,686)
|
|
Inventories
|
(381,910)
|
|
|
(230,993)
|
|
Residential mortgage
loans available-for-sale
|
151,886
|
|
|
119,976
|
|
Other
assets
|
(25,133)
|
|
|
(3,830)
|
|
Accounts payable,
accrued and other liabilities
|
31,999
|
|
|
(28,792)
|
|
Net cash provided by
(used in) operating activities
|
(64,062)
|
|
|
(25,397)
|
|
Cash flows from
investing activities:
|
|
|
|
Capital
expenditures
|
(9,460)
|
|
|
(14,517)
|
|
Cash used for
business acquisition
|
(430,011)
|
|
|
—
|
|
Other investing
activities, net
|
(12,281)
|
|
|
4,632
|
|
Net cash used in
investing activities
|
(451,752)
|
|
|
(9,885)
|
|
Cash flows from
financing activities:
|
|
|
|
Proceeds from debt
issuance
|
991,575
|
|
|
—
|
|
Repayments of
debt
|
(702)
|
|
|
—
|
|
Borrowings under
revolving credit facility
|
220,000
|
|
|
—
|
|
Repayments under
revolving credit facility
|
(220,000)
|
|
|
—
|
|
Financial Services
borrowings (repayments)
|
(149,263)
|
|
|
(72,678)
|
|
Stock option
exercises
|
52
|
|
|
6,596
|
|
Share
repurchases
|
(52,745)
|
|
|
(107,955)
|
|
Dividends
paid
|
(31,568)
|
|
|
(29,616)
|
|
Net cash provided by
(used in) financing activities
|
757,349
|
|
|
(203,653)
|
|
Net increase
(decrease) in cash and equivalents
|
241,535
|
|
|
(238,935)
|
|
Cash and equivalents
at beginning of period
|
754,161
|
|
|
1,292,862
|
|
Cash and equivalents
at end of period
|
$
|
995,696
|
|
|
$
|
1,053,927
|
|
|
|
|
|
Supplemental Cash
Flow Information:
|
|
|
|
Interest paid
(capitalized), net
|
$
|
(23,124)
|
|
|
$
|
(21,412)
|
|
Income taxes paid
(refunded), net
|
$
|
1,212
|
|
|
$
|
(1,997)
|
|
PulteGroup,
Inc.
Segment
Data
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
HOMEBUILDING:
|
|
|
|
Home sale
revenues
|
$
|
1,394,243
|
|
|
$
|
1,088,158
|
|
Land sale
revenues
|
2,487
|
|
|
17,542
|
|
Total Homebuilding
revenues
|
1,396,730
|
|
|
1,105,700
|
|
|
|
|
|
Home sale cost of
revenues
|
1,089,329
|
|
|
841,145
|
|
Land sale cost of
revenues
|
2,028
|
|
|
13,378
|
|
Selling, general, and
administrative expenses
|
191,015
|
|
|
161,312
|
|
Other expense
(income), net
|
5,925
|
|
|
(883)
|
|
Income before income
taxes
|
$
|
108,433
|
|
|
$
|
90,748
|
|
|
|
|
|
FINANCIAL
SERVICES:
|
|
|
|
Income before income
taxes
|
$
|
9,780
|
|
|
$
|
5,057
|
|
|
|
|
|
CONSOLIDATED:
|
|
|
|
Income before income
taxes
|
$
|
118,213
|
|
|
$
|
95,805
|
|
PulteGroup,
Inc.
Segment Data,
continued
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
|
|
|
|
Home sale
revenues
|
$
|
1,394,243
|
|
|
$
|
1,088,158
|
|
|
|
|
|
Closings -
units
|
|
|
|
Northeast
|
262
|
|
|
248
|
|
Southeast
(a)
|
826
|
|
|
612
|
|
Florida
|
745
|
|
|
601
|
|
Midwest
|
552
|
|
|
569
|
|
Texas
|
775
|
|
|
746
|
|
West
|
785
|
|
|
589
|
|
|
3,945
|
|
|
3,365
|
|
Average selling
price
|
$
|
353
|
|
|
$
|
323
|
|
|
|
|
|
Net new orders -
units
|
|
|
|
Northeast
|
378
|
|
|
437
|
|
Southeast
(a)
|
1,052
|
|
|
938
|
|
Florida
|
923
|
|
|
911
|
|
Midwest
|
994
|
|
|
763
|
|
Texas
|
1,121
|
|
|
1,117
|
|
West
|
1,184
|
|
|
973
|
|
|
5,652
|
|
|
5,139
|
|
Net new orders -
dollars (b)
|
$
|
2,113,973
|
|
|
$
|
1,708,390
|
|
|
|
|
|
Unit
backlog
|
|
|
|
Northeast
|
560
|
|
|
650
|
|
Southeast
(a)
|
1,689
|
|
|
1,294
|
|
Florida
|
1,452
|
|
|
1,312
|
|
Midwest
|
1,531
|
|
|
1,382
|
|
Texas
|
1,691
|
|
|
1,644
|
|
West
|
1,832
|
|
|
1,342
|
|
|
8,755
|
|
|
7,624
|
|
Dollars in
backlog
|
$
|
3,359,157
|
|
|
$
|
2,564,092
|
|
|
|
|
|
(a) Southeast includes
the acquisition in January 2016 of
substantially all of the assets of JW Homes
("Wieland").
(b) Net
new orders excludes backlog acquired from Wieland in January 2016. Net new order dollars represent a
composite of new order dollars combined with other movements of the
dollars in backlog related to cancellations and change
orders.
PulteGroup,
Inc.
Segment Data,
continued
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
MORTGAGE
ORIGINATIONS:
|
|
|
|
Origination
volume
|
2,548
|
|
|
2,116
|
|
Origination
principal
|
$
|
666,647
|
|
|
$
|
514,788
|
|
Capture
rate
|
81.1
|
%
|
|
81.6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Data
($000's
omitted)
(Unaudited)
|
|
|
|
|
|
Three Months
Ended
|
|
March
31,
|
|
2016
|
|
2015
|
|
|
|
|
Interest in
inventory, beginning of period
|
$
|
149,498
|
|
|
$
|
167,638
|
|
Interest
capitalized
|
35,284
|
|
|
30,803
|
|
Interest
expensed
|
(26,129)
|
|
|
(31,554)
|
|
Interest in
inventory, end of period
|
$
|
158,653
|
|
|
$
|
166,887
|
|
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/pultegroup-inc-reports-first-quarter-2016-financial-results-300254977.html
SOURCE PulteGroup, Inc.