-
Q1 Earnings Increased 111% Over Prior Year to $0.59 Per Share
-
Home Sale Revenues Gained 21% to $1.9 Billion; Closings Increased
9% to 4,626 Homes
-
Home Sale Gross Margins Increased 40 Basis Points to 23.6%
-
Operating Margin Increased 270 Basis Points to 11.0%
-
Value of Net New Orders Increased 18% to $2.9 Billion; Net New
Orders Gained 12% to 6,875 Homes
-
Backlog Value Up 30% to $5.0 Billion; Unit Backlog Increased 21% to
11,245 Homes
-
Repurchased $52 Million of Stock During the Quarter
ATLANTA--(BUSINESS WIRE)--
PulteGroup, Inc. (NYSE: PHM) announced today financial results for its
first quarter ended March 31, 2018. For the quarter, the Company
reported an 87% increase in net income to $171 million, and a 111% gain
in earnings to $0.59 per share. The Company’s prior year net income was
$92 million, or $0.28 per share, inclusive of $0.03 per share of expense
associated with the resolution of certain insurance matters.
“PulteGroup has gotten off to an exceptional start in 2018, as we
realized 21% top line growth while effectively doubling reported
earnings per share,” said Ryan Marshall, President and CEO of
PulteGroup. “By continuing to invest organically within our established
markets, we have put ourselves in position to grow our business while
continuing to generate high returns.”
“Robust buyer demand in the face of mortgage and financial market
volatility attests to the strong underpinnings of this housing recovery
which is being bolstered by sustained economic growth, good job trends,
favorable demographics and a limited supply of homes for sale,” said
Marshall. “Within this environment, we believe that our diversified
operating platform, balanced customer base, and supportive land pipeline
puts the Company in a strong competitive position to achieve its
long-term financial goals.”
Home sale revenues for the first quarter totaled $1.9 billion, an
increase of 21% over the prior year. Higher revenues for the quarter
were driven by a 10% increase in average selling price to $413,000, in
combination with a 9% increase in closings to 4,626 homes.
Home sale gross profits for the quarter were $452 million, or 23.6% of
home sale revenues, compared with $368 million, or 23.2% of home sale
revenues, in the prior year. SG&A expense for the first quarter was $241
million, or 12.6% of home sale revenues. SG&A expense for the prior year
was $236 million, or 14.9% of home sale revenues, inclusive of $15
million of expenses associated with the resolution of certain insurance
matters. Operating margin for the period was 11.0%, an increase of 270
basis over prior year reported operating margin of 8.3%.
For the quarter, net new orders increased 12% over the prior year to
6,875 homes, as the dollar value of net new orders increased 18% to $2.9
billion. During the first quarter, the Company operated out of 844
communities, which was up 8% over 2017.
The Company ended the quarter with a backlog of 11,245 homes valued at
$5.0 billion, which are increases of 21% and 30%, respectively, over
last year, and represent decade highs for the period. The average sales
price in backlog increased 8% over last year to $441,000, as price
benefitted from the product and geographic mix of homes, as well as
higher selling prices realized within each buyer group.
PulteGroup’s financial services operations generated pretax income of
$14 million, which is unchanged from last year, as the benefit of higher
production volumes was offset by more competitive market conditions that
impacted pricing and capture rate. Mortgage capture rate for the first
quarter was 78% compared with 80% in the first quarter of 2017.
The Company ended the quarter with $185 million of cash. During the
quarter, the Company repurchased 1.7 million common shares for $52
million, or an average price of $30.86 per share.
A conference call discussing PulteGroup's first quarter results is
scheduled for Tuesday, April 24, 2018, 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,” “plan,” “project,” “may,”
“can,” “could,” “might,” "should", “will” and similar expressions
identify forward-looking statements, including statements related to any
impairment charge and the impacts or effects thereof, 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;
competition within the industries in which we operate; the availability
and cost of land and other raw materials used by us in our 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 and the levels of our land spend; the availability and
cost of insurance covering risks associated with our 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,
including, but not limited to the Tax Cuts and Jobs Act which could have
a greater impact on our effective tax rate or the value of our deferred
tax assets than we anticipate; economic changes nationally or in our
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, 2017, 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,
|
|
|
|
|
2018
|
|
|
2017
|
|
Revenues:
|
|
|
|
|
|
|
|
Homebuilding
|
|
|
|
|
|
|
|
Home sale revenues
|
|
|
$
|
1,911,598
|
|
|
|
$
|
1,585,421
|
|
|
Land sale and other revenues
|
|
|
12,557
|
|
|
|
2,690
|
|
|
|
|
|
1,924,155
|
|
|
|
1,588,111
|
|
|
Financial Services
|
|
|
45,938
|
|
|
|
41,767
|
|
|
Total revenues
|
|
|
1,970,093
|
|
|
|
1,629,878
|
|
|
|
|
|
|
|
|
|
|
Homebuilding Cost of Revenues:
|
|
|
|
|
|
|
|
Home sale cost of revenues
|
|
|
(1,459,940
|
)
|
|
|
(1,217,678
|
)
|
|
Land sale cost of revenues
|
|
|
(11,548
|
)
|
|
|
(3,228
|
)
|
|
|
|
|
(1,471,488
|
)
|
|
|
(1,220,906
|
)
|
|
|
|
|
|
|
|
|
|
Financial Services expenses
|
|
|
(32,213
|
)
|
|
|
(28,367
|
)
|
|
Selling, general, and administrative expenses
|
|
|
(240,893
|
)
|
|
|
(236,268
|
)
|
|
Other expense, net
|
|
|
(1,308
|
)
|
|
|
(5,072
|
)
|
|
Income before income taxes
|
|
|
224,191
|
|
|
|
139,265
|
|
|
Income tax expense
|
|
|
(53,440
|
)
|
|
|
(47,747
|
)
|
|
Net income
|
|
|
$
|
170,751
|
|
|
|
$
|
91,518
|
|
|
|
|
|
|
|
|
|
|
Per share:
|
|
|
|
|
|
|
|
Basic earnings
|
|
|
$
|
0.59
|
|
|
|
$
|
0.29
|
|
|
Diluted earnings
|
|
|
$
|
0.59
|
|
|
|
$
|
0.28
|
|
|
Cash dividends declared
|
|
|
$
|
0.09
|
|
|
|
$
|
0.09
|
|
|
|
|
|
|
|
|
|
|
Number of shares used in calculation:
|
|
|
|
|
|
|
|
Basic
|
|
|
286,683
|
|
|
|
317,756
|
|
|
Effect of dilutive securities
|
|
|
1,343
|
|
|
|
2,329
|
|
|
Diluted
|
|
|
288,026
|
|
|
|
320,085
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PulteGroup, Inc.
Condensed Consolidated Balance Sheets
($000's omitted)
(Unaudited)
|
|
|
|
|
March 31,
2018
|
|
|
December 31,
2017
|
|
|
|
|
|
|
|
|
|
ASSETS
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and equivalents
|
|
|
$
|
150,821
|
|
|
|
$
|
272,683
|
|
Restricted cash
|
|
|
33,966
|
|
|
|
33,485
|
|
Total cash, cash equivalents, and restricted cash
|
|
|
184,787
|
|
|
|
306,168
|
|
House and land inventory
|
|
|
7,465,028
|
|
|
|
7,147,130
|
|
Land held for sale
|
|
|
69,522
|
|
|
|
68,384
|
|
Residential mortgage loans available-for-sale
|
|
|
385,453
|
|
|
|
570,600
|
|
Investments in unconsolidated entities
|
|
|
64,810
|
|
|
|
62,957
|
|
Other assets
|
|
|
784,355
|
|
|
|
745,123
|
|
Intangible assets
|
|
|
137,542
|
|
|
|
140,992
|
|
Deferred tax assets, net
|
|
|
614,898
|
|
|
|
645,295
|
|
|
|
|
$
|
9,706,395
|
|
|
|
$
|
9,686,649
|
|
|
|
|
|
|
|
|
|
LIABILITIES AND SHAREHOLDERS’ EQUITY
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
Accounts payable
|
|
|
$
|
446,304
|
|
|
|
$
|
393,815
|
|
Customer deposits
|
|
|
308,864
|
|
|
|
250,779
|
|
Accrued and other liabilities
|
|
|
1,226,233
|
|
|
|
1,356,333
|
|
Income tax liabilities
|
|
|
115,667
|
|
|
|
86,925
|
|
Financial Services debt
|
|
|
246,952
|
|
|
|
437,804
|
|
Notes payable
|
|
|
3,087,718
|
|
|
|
3,006,967
|
|
|
|
|
5,431,738
|
|
|
|
5,532,623
|
|
Shareholders' equity
|
|
|
4,274,657
|
|
|
|
4,154,026
|
|
|
|
|
$
|
9,706,395
|
|
|
|
$
|
9,686,649
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PulteGroup, Inc.
Consolidated Statements of Cash Flows
($000's omitted)
(Unaudited)
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
Cash flows from operating activities:
|
|
|
|
|
|
|
|
Net income
|
|
|
$
|
170,751
|
|
|
|
$
|
91,518
|
|
|
Adjustments to reconcile net income to net cash from operating
activities:
|
|
|
|
|
|
|
|
Deferred income tax expense
|
|
|
23,479
|
|
|
|
39,226
|
|
|
Land-related charges
|
|
|
3,419
|
|
|
|
3,535
|
|
|
Depreciation and amortization
|
|
|
11,890
|
|
|
|
13,209
|
|
|
Share-based compensation expense
|
|
|
8,451
|
|
|
|
14,161
|
|
|
Other, net
|
|
|
(793
|
)
|
|
|
555
|
|
|
Increase (decrease) in cash due to:
|
|
|
|
|
|
|
|
Inventories
|
|
|
(237,169
|
)
|
|
|
(267,014
|
)
|
|
Residential mortgage loans available-for-sale
|
|
|
185,147
|
|
|
|
194,117
|
|
|
Other assets
|
|
|
(9,246
|
)
|
|
|
21,858
|
|
|
Accounts payable, accrued and other liabilities
|
|
|
13,084
|
|
|
|
(71,362
|
)
|
|
Net cash provided by (used in) operating activities
|
|
|
169,013
|
|
|
|
39,803
|
|
|
Cash flows from investing activities:
|
|
|
|
|
|
|
|
Capital expenditures
|
|
|
(15,428
|
)
|
|
|
(9,996
|
)
|
|
Investments in unconsolidated entities
|
|
|
(1,000
|
)
|
|
|
(14,802
|
)
|
|
Other investing activities, net
|
|
|
452
|
|
|
|
1,423
|
|
|
Net cash used in investing activities
|
|
|
(15,976
|
)
|
|
|
(23,375
|
)
|
|
Cash flows from financing activities:
|
|
|
|
|
|
|
|
Repayments of debt
|
|
|
(451
|
)
|
|
|
(1,067
|
)
|
|
Borrowings under revolving credit facility
|
|
|
768,000
|
|
|
|
—
|
|
|
Repayments under revolving credit facility
|
|
|
(768,000
|
)
|
|
|
—
|
|
|
Financial Services borrowings (repayments)
|
|
|
(190,852
|
)
|
|
|
(191,240
|
)
|
|
Stock option exercises
|
|
|
2,723
|
|
|
|
11,118
|
|
|
Share repurchases
|
|
|
(59,491
|
)
|
|
|
(105,522
|
)
|
|
Dividends paid
|
|
|
(26,347
|
)
|
|
|
(29,102
|
)
|
|
Net cash provided by (used in) financing activities
|
|
|
(274,418
|
)
|
|
|
(315,813
|
)
|
|
Net increase (decrease)
|
|
|
(121,381
|
)
|
|
|
(299,385
|
)
|
|
Cash, cash equivalents, and restricted cash at beginning of period
|
|
|
306,168
|
|
|
|
723,248
|
|
|
Cash, cash equivalents, and restricted cash at end of period
|
|
|
$
|
184,787
|
|
|
|
$
|
423,863
|
|
|
|
|
|
|
|
|
|
|
Supplemental Cash Flow Information:
|
|
|
|
|
|
|
|
Interest paid (capitalized), net
|
|
|
$
|
30,109
|
|
|
|
$
|
12,830
|
|
|
Income taxes paid (refunded), net
|
|
|
$
|
631
|
|
|
|
$
|
1,043
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PulteGroup, Inc.
Segment Data
($000's omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
HOMEBUILDING:
|
|
|
|
|
|
|
|
Home sale revenues
|
|
|
$
|
1,911,598
|
|
|
|
$
|
1,585,421
|
|
|
Land sale and other revenues
|
|
|
12,557
|
|
|
|
2,690
|
|
|
Total Homebuilding revenues
|
|
|
1,924,155
|
|
|
|
1,588,111
|
|
|
|
|
|
|
|
|
|
|
Home sale cost of revenues
|
|
|
(1,459,940
|
)
|
|
|
(1,217,678
|
)
|
|
Land sale cost of revenues
|
|
|
(11,548
|
)
|
|
|
(3,228
|
)
|
|
Selling, general, and administrative expenses ("SG&A")
|
|
|
(240,893
|
)
|
|
|
(236,268
|
)
|
|
Other expense, net
|
|
|
(1,416
|
)
|
|
|
(5,175
|
)
|
|
Income before income taxes
|
|
|
$
|
210,358
|
|
|
|
$
|
125,762
|
|
|
|
|
|
|
|
|
|
|
FINANCIAL SERVICES:
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
$
|
13,833
|
|
|
|
$
|
13,503
|
|
|
|
|
|
|
|
|
|
|
CONSOLIDATED:
|
|
|
|
|
|
|
|
Income before income taxes
|
|
|
$
|
224,191
|
|
|
|
$
|
139,265
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
OPERATING METRICS:
|
|
|
|
|
|
|
|
Gross margin % (a)(b)
|
|
|
23.6
|
%
|
|
|
23.2
|
%
|
|
SG&A % (a)
|
|
|
(12.6
|
)%
|
|
|
(14.9
|
)%
|
|
Operating margin % (a)
|
|
|
11.0
|
%
|
|
|
8.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
(a) As a percentage of home sale revenues.
|
|
(b) Gross margin equals home sale revenues minus home sale cost
of revenues.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PulteGroup, Inc.
Segment Data, continued
($000's omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
Home sale revenues
|
|
|
$
|
1,911,598
|
|
|
|
$
|
1,585,421
|
|
|
|
|
|
|
|
|
|
Closings - units
|
|
|
|
|
|
|
|
Northeast
|
|
|
251
|
|
|
|
232
|
|
Southeast
|
|
|
924
|
|
|
|
836
|
|
Florida
|
|
|
887
|
|
|
|
832
|
|
Midwest
|
|
|
767
|
|
|
|
668
|
|
Texas
|
|
|
809
|
|
|
|
840
|
|
West
|
|
|
988
|
|
|
|
817
|
|
|
|
|
4,626
|
|
|
|
4,225
|
|
Average selling price
|
|
|
$
|
413
|
|
|
|
$
|
375
|
|
|
|
|
|
|
|
|
|
Net new orders - units
|
|
|
|
|
|
|
|
Northeast
|
|
|
448
|
|
|
|
411
|
|
Southeast
|
|
|
1,259
|
|
|
|
1,077
|
|
Florida
|
|
|
1,444
|
|
|
|
1,040
|
|
Midwest
|
|
|
1,102
|
|
|
|
1,162
|
|
Texas
|
|
|
1,323
|
|
|
|
1,211
|
|
West
|
|
|
1,299
|
|
|
|
1,225
|
|
|
|
|
6,875
|
|
|
|
6,126
|
|
Net new orders - dollars
|
|
|
$
|
2,893,552
|
|
|
|
$
|
2,446,141
|
|
|
|
|
|
|
|
|
|
Unit backlog
|
|
|
|
|
|
|
|
Northeast
|
|
|
709
|
|
|
|
566
|
|
Southeast
|
|
|
2,051
|
|
|
|
1,612
|
|
Florida
|
|
|
2,235
|
|
|
|
1,626
|
|
Midwest
|
|
|
1,822
|
|
|
|
1,801
|
|
Texas
|
|
|
1,940
|
|
|
|
1,783
|
|
West
|
|
|
2,488
|
|
|
|
1,935
|
|
|
|
|
11,245
|
|
|
|
9,323
|
|
Dollars in backlog
|
|
|
$
|
4,961,018
|
|
|
|
$
|
3,802,231
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
PulteGroup, Inc.
Segment Data, continued
($000's omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
MORTGAGE ORIGINATIONS:
|
|
|
|
|
|
|
|
Origination volume
|
|
|
2,992
|
|
|
|
2,873
|
|
|
Origination principal
|
|
|
$
|
909,800
|
|
|
|
$
|
806,352
|
|
|
Capture rate
|
|
|
77.7
|
%
|
|
|
80.3
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Data
($000's omitted)
(Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
March 31,
|
|
|
|
|
2018
|
|
|
2017
|
|
|
|
|
|
|
|
|
|
Interest in inventory, beginning of period
|
|
|
$
|
226,611
|
|
|
|
$
|
186,097
|
|
|
Interest capitalized
|
|
|
43,960
|
|
|
|
44,923
|
|
|
Interest expensed
|
|
|
(30,558
|
)
|
|
|
(27,192
|
)
|
|
Interest in inventory, end of period
|
|
|
$
|
240,013
|
|
|
|
$
|
203,828
|
|
|
|
|
|
|
|
|
|
|
|
|
|
View source version on businesswire.com: https://www.businesswire.com/news/home/20180424005226/en/
Source: PulteGroup, Inc.