BLOOMFIELD HILLS, Mich., April 23 /PRNewswire-FirstCall/ -- Pulte Homes announced today financial results for its first quarter ended March 31, 2008. For the quarter, the Company reported a net loss of $696.1 million, or $2.75 per share, compared with an $85.7 million net loss for the prior year first quarter, or $0.34 per share. The first quarter 2008 net loss included $663.6 million of pre-tax charges related to inventory impairments and other land-related charges. Impairments and land-related charges for the prior year quarter were $132.1 million. Consolidated revenues for the quarter were $1.4 billion, a decline of 23% from prior year revenues of $1.9 billion.
"The difficult housing environment continued to erode during the first quarter of 2008," said Richard J. Dugas, Jr., President and CEO of Pulte Homes. "Buyer demand for new homes continues to be soft, home prices remain under pressure, and overall buyer confidence is weak. Despite these market challenges, Pulte continues to make progress on its cash position, selling homes and reducing its cost structure. Our results were better than the guidance previously provided of a loss of $0.15 to $0.30 per share from continuing operations, exclusive of any impairments or land-related charges. This performance was accomplished through a company-wide commitment to sell and close homes during the quarter and continued efforts to control overhead. We also reduced both our level of speculative inventory and number of controlled lots. We ended the quarter with a $1.1 billion cash balance, inclusive of a $212 million tax refund, and no debt outstanding under our $1.6 billion revolving credit facility. Pulte will continue to position the company to capitalize on any market stabilization and eventual recovery."
Revenues from homebuilding settlements in the first quarter decreased 22% to $1.4 billion compared with $1.8 billion last year. The change in revenue for the quarter reflects a 13% decrease in closings to 4,733 homes, and an 11% decrease in average selling price to $295,000.
First quarter homebuilding pre-tax loss was $705.1 million, compared with a $148.4 million pre-tax loss for the prior year quarter. The pre-tax loss for the 2008 first quarter reflects a decline in gross margins primarily related to the impact of impairments recorded in connection with our land inventory. Homebuilding SG&A expense decreased $79.7 million, or 28%, compared with the prior year quarter. During the first quarter of 2008, the Company recorded $663.6 million of impairments and land-related charges, including $598.8 million related to land impairments, $0.3 million associated with the write-off of land deposits and pre-acquisition costs, and $64.5 million of impairments of land held for sale. For the prior year quarter, these impairments and land-related charges totaled $132.1 million.
Net new home orders for the first quarter were 5,402 homes, valued at $1.5 billion, which represent declines of 36% and 50%, respectively, from prior year first quarter results. Pulte Homes' ending backlog as of March 31, 2008 was valued at $2.6 billion (8,559 homes), compared with a value of $4.7 billion (13,334 homes) at the end of last year's first quarter. At the end of the first quarter 2008, the Company's debt-to-capitalization ratio was 49%, and on a net debt-to-capitalization basis was 40%.
The Company's financial services operations reported pre-tax income of $15 million for the first quarter 2008, compared with $13.2 million of pre-tax income for the prior year's quarter. The increase in first quarter 2008 pre-tax income was partially due to a shift in the mix of mortgage loans closed toward more profitable agency-backed products. This was partially offset by a 32% decline in mortgage loans originated during the quarter compared with the prior year's quarter. The mortgage capture rate for the quarter was 89.9%, compared with 93% for the same quarter last year.
Second Quarter 2008 Guidance
"For the second quarter of 2008 we are projecting a net loss from continuing operations in the range from $0.10 to $0.20 per share, exclusive of a tax benefit and any additional impairments or land-related charges," said Dugas. "Pulte also remains focused on inventory reduction and cash management, and continues to target a cash position by the end of 2008 of $2.0 billion to $2.2 billion."
A conference call discussing Pulte Homes' first quarter results will be held Thursday, April 24, 2008 at 8:30 a.m. Eastern Time, and web cast live via Pulte.com. Interested investors can access the call via the Company's home page at http://www.pulte.com/ .
Certain statements in this release constitute "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such forward-looking statements involve known risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. Such factors include, among other things, (1) general economic and business conditions; (2) interest rate changes and the availability of mortgage financing; (3) the relative stability of debt and equity markets; (4) competition; (5) the availability and cost of land and other raw materials used by the Company in its homebuilding operations; (6) the availability and cost of insurance covering risks associated with the Company's business; (7) shortages and the cost of labor; (8) weather related slowdowns; (9) slow growth initiatives and/or local building moratoria; (10) governmental regulation, including the interpretation of tax, labor and environmental laws; (11) changes in consumer confidence and preferences; (12) required accounting changes; (13) terrorist acts and other acts of war; and (14) other factors over which the Company has little or no control. See the Company's Annual Report on Form 10-K and Annual Report to Shareholders for the year ended December 31, 2007 and other public filings with the Securities and Exchange Commission for a further discussion of these and other risks and uncertainties applicable to Pulte's business. Pulte undertakes no duty to update any forward-looking statement whether as a result of new information, future events or changes in Pulte's expectations.
About Pulte Homes
Pulte Homes, Inc., , based in Bloomfield Hills, Mich., is one of America's largest home building companies with operations in 51 markets and 26 states. During its 58-year history, the company has delivered more than 500,000 new homes. Since 2000, Pulte Homes operations have earned more top-three finishes than any other homebuilder in the annual J.D. Power and Associates(R) New Home-Builder Customer Satisfaction Study(sm). Under its Del Webb brand, Pulte is the nation's largest builder of active adult communities for people age 55 and older. Its DiVosta Homes brand is renowned in Florida for its Built Solid(TM) building system and distinctive master-planned communities. Pulte Mortgage LLC is a nationwide lender offering Pulte customers a wide variety of loan products and superior service. Websites: http://www.pulte.com/ ; http://www.delwebb.com/ ; http://www.divosta.com/ .
Pulte Homes, Inc. Condensed Consolidated Results Of Operations (000's omitted, except per share data) (Unaudited) Three Months Ended March 31, -------------------------- 2008 2007 ----------- ---------- CONSOLIDATED RESULTS: Revenues: Homebuilding $1,398,109 $1,829,908 Financial Services 43,488 39,581 Other non-operating 7,222 1,944 ---------- ---------- Total Revenues $1,448,819 $1,871,433 ========== ========== Pre-tax income (loss): Homebuilding $(705,130) $(148,386) Financial Services 15,044 13,195 Other non-operating (2,970) (7,357) ---------- ---------- Loss before income taxes (693,056) (142,548) Income taxes (benefit)* 3,088 (56,876) ---------- ---------- Net loss $(696,144) $(85,672) ========== ========== EARNINGS PER SHARE - ASSUMING DILUTION: Net loss $(2.75) $(0.34) ========== ========== Shares used in per share calculations 253,166 251,919 ========== ========== * Due to the uncertainty of the realization of a $258 million deferred tax benefit associated with the $693.1 million pre-tax loss in the first quarter 2008, the Company recorded a valuation allowance against that deferred tax benefit during the quarter, in accordance with Statement of Financial Accounting Standards No. 109 "Accounting for Income Taxes." Pulte Homes, Inc. Condensed Consolidated Balance Sheets ($000's omitted) March 31, December 31, 2008 2007 (Unaudited) (Unaudited) ------------ ------------- ASSETS Cash and equivalents $1,071,165 $1,060,311 Unfunded settlements 29,017 38,714 House and land inventory 6,179,847 7,027,511 Land held for sale 324,801 252,563 Land, not owned, under option agreements 19,507 20,838 Residential mortgage loans available-for-sale 284,104 447,089 Investments in unconsolidated entities 109,991 105,479 Other assets 922,786 1,167,292 Deferred income tax assets 105,906 105,906 ---------- ----------- $9,047,124 $10,225,703 ========== =========== LIABILITIES AND SHAREHOLDERS' EQUITY Liabilities: Accounts payable, accrued and other liabilities $1,578,921 $1,859,911 Collateralized short- term debt, recourse solely to applicable subsidiary assets 257,139 440,611 Income taxes 108,105 126,758 Senior notes 3,478,577 3,478,230 ---------- ----------- Total Liabilities 5,422,742 5,905,510 Shareholders' Equity 3,624,382 4,320,193 ---------- ----------- $9,047,124 $10,225,703 ========== =========== Pulte Homes, Inc. Segment Data ($000's omitted) (Unaudited) Three Months Ended March 31, ----------------------------- 2008 2007 ---------- ---------- HOMEBUILDING: Home sales (settlements) $1,396,431 $1,789,282 Land sales 1,678 40,626 ---------- ---------- Homebuilding Revenue 1,398,109 1,829,908 Home cost of sales (1,845,054) (1,594,471) Land cost of sales (64,948) (56,362) Selling, general & administrative expense (201,937) (281,653) Other income (expense), net 8,700 (45,808) ---------- ---------- Pre-tax loss $(705,130) $(148,386) =========== =========== FINANCIAL SERVICES: Pre-tax income $15,044 $13,195 =========== =========== OTHER NON-OPERATING: Pre-tax loss: Net interest income $6,474 $954 Other expense, net (9,444) (8,311) ----------- ----------- Total Other non-operating $(2,970) $(7,357) =========== =========== Pulte Homes, Inc. Business Operating Data ($000's omitted) (Unaudited) Three Months Ended March 31, ------------------------- 2008 2007 ---------- ---------- Homebuilding settlement revenues $1,396,431 $1,789,282 ========== ========== Unit settlements: Northeast 393 371 Southeast 748 755 Florida 741 1,027 Midwest 623 643 Central 551 699 Southwest 1,197 1,333 California 480 592 ---------- ---------- 4,733 5,420 ========== ========== Average selling price $295 $330 ========== ========== Unit net new orders: Northeast 502 704 Southeast 824 1,006 Florida 993 1,522 Midwest 579 1,020 Central 530 624 Southwest 1,467 2,467 California 507 1,156 ---------- ---------- 5,402 8,499 Net new orders - ========== ========== dollars* $1,461,000 $2,912,000 ========== ========== Unit backlog: Northeast 900 1,250 Southeast 1,357 1,959 Florida 1,504 1,707 Midwest 784 1,774 Central 849 1,047 Southwest 2,280 3,853 California 885 1,744 ---------- ---------- 8,559 13,334 ========== ========== Dollars in backlog $2,574,000 $4,703,000 ========== ========== * Net new order dollars represent a composite of new order dollars combined with other movement of the dollars in backlog related to cancellations and change orders. Pulte Homes, Inc. Business Operating Data, continued ($000's omitted) (Unaudited) Three Months Ended March 31, ---------------------- 2008 2007 --------- ----------- MORTGAGE ORIGINATIONS: Origination volume 3,514 5,158 ========= =========== Origination principal $803,400 $1,143,000 ========= =========== Capture rate percentage 89.9% 93.0% ========= =========== Pulte Homes, Inc. Supplemental Information ($000's omitted) (Unaudited) Three Months Ended March 31, ------------------ 2008 2007 ------- ------- Interest expense: Homebuilding (included in home cost of sales) $58,492 $47,958 Financial Services 1,870 4,618 Other non-operating 748 990 ------- ------- Total interest expense $61,110 $53,566 ======= ======= Depreciation & amortization $19,715 $21,660 ======= =======
