D.R. Horton Reports First Profit in Nearly Three Years

02/04/2010

FORT WORTH, TX -- D.R. Horton, Inc. this week reported net income of $192 million during its first fiscal quarter of 2010, which ended December 31, 2009. A year earlier, the company reported a $62 million loss for the same period.

The company said net sales orders for the first quarter increased 45% to 4,037 homes ($850 million), compared to 2,777 homes ($568 million) for the same quarter of fiscal 2009. The Company's cancellation rate (cancelled sales orders divided by gross sales orders) for the first quarter of fiscal 2010 was 26%.

Donald R. Horton, Chairman of the Board, said, "We are excited to report a quarterly pre-tax profit of $42.8 million and net income of $192.0 million. Our homes closed increased 36% over the prior year while our homes gross margin improved 460 basis points sequentially to 17.1%. Our homebuilding SG&A dollars increased only 1% from the year ago quarter while homebuilding revenues increased 23%, bringing our SG&A as a percentage of homebuilding revenues down to 11.6%.

"Our net sales orders also showed significant improvement from the year ago quarter, increasing 45%. Our focus on providing affordable homes positioned us to take advantage of the demand created by the federal tax credit for first-time homebuyers, and we believe that the extension of the tax credit will benefit our spring selling season.

"Market conditions in the homebuilding industry are still challenging, characterized by rising foreclosures, high inventory levels of available homes, increasing unemployment, tightening FHA lending standards and weak consumer confidence. However, new home inventory remains low, interest rates are favorable and housing affordability is near record highs."