Net Orders Up 33%; Net Order Value Up 38% to $1.1 Billion
Backlog
Value Increases to $1.6 Billion
LOS ANGELES--(BUSINESS WIRE)--
KB Home (NYSE: KBH), one of the nation's largest and most recognized
homebuilders, today reported results for its second quarter ended
May 31, 2015. Highlights and developments include the following:
Three Months Ended May 31, 2015
-
Total revenues of $623.0 million grew 10% from $565.0 million in the
year-earlier quarter, extending the Company's trend of year-over-year
revenue increases to 15 consecutive quarters. The current quarter
revenue growth was driven by increases in the Company's housing and
land sale revenues.
-
Housing revenues rose 8% to $604.9 million from $559.8 million for
the year-earlier quarter, reflecting expanded delivery volume and
a higher overall average selling price.
-
The Company delivered 1,787 homes, up 2% from 1,751 homes in
the year-earlier quarter.
-
The overall average selling price of homes delivered advanced
6% to $338,500, compared to $319,700 for the corresponding
period of 2014. Average selling prices increased in the
Company's West Coast, Central and Southeast regions, while its
Southwest region's average selling price was essentially even.
-
Land sale revenues increased to $15.9 million from $2.6 million a
year ago, reflecting sales in three of the Company's four regions.
-
Homebuilding operating income totaled $17.9 million, compared to $34.3
million in the 2014 second quarter. Housing gross profits of $96.6
million declined $9.1 million from $105.7 million in the year-earlier
quarter. Land sales had minimal impact on operating income for the
second quarters of 2015 and 2014.
-
The Company's housing gross profit margin of 16.0% decreased 290
basis points from 18.9% in the year-earlier quarter. On a
sequential basis, the housing gross profit margin improved 90
basis points from the first quarter of 2015.
-
The year-over-year decline in the housing gross profit margin
was primarily due to higher land and construction costs,
increased pricing pressure in certain markets, start-up field
costs associated with new community openings, and an increase
in the amortization of previously capitalized interest.
-
Excluding the amortization of previously capitalized interest
and land option contract abandonment charges in each period,
which had a combined year-over-year impact of 60 basis points,
the Company's second quarter adjusted housing gross profit
margin was 20.3% in 2015 and 22.6% in 2014.
-
Selling, general and administrative expenses rose year over year
mainly due to higher staffing levels and community opening-related
expenses in connection with the Company's community count
expansion strategy and to support delivery growth anticipated for
the second half of 2015. As a percentage of housing revenues,
selling, general and administrative expenses increased slightly to
13.0% from 12.8% for the prior-year quarter. Compared to the first
quarter of 2015, this ratio improved 50 basis points.
-
Interest expense decreased to $8.1 million from $8.6 million in the
year-earlier quarter, with an increase in interest incurred, stemming
from a higher debt level, more than offset by a greater amount of
interest capitalized due to an increase in qualifying inventory in the
current quarter.
-
Financial services operations generated pretax income of $3.2 million,
rising 82% from $1.8 million in the year-earlier quarter. The current
quarter results included $2.0 million of pretax income from Home
Community Mortgage, LLC, the Company's mortgage banking joint venture
with Nationstar Mortgage LLC, which commenced operations in July 2014.
-
Net income totaled $9.6 million, or $.10 per diluted share, compared
to $26.6 million, or $.27 per diluted share, for the second quarter of
2014.
-
Income tax expense increased to $3.1 million from $.3 million in
the year-earlier quarter. Income tax expense for the 2014 second
quarter reflected the Company's full deferred tax asset valuation
allowance, which was substantially reversed in the fourth quarter
of 2014.
-
Income tax expense in the current quarter was reduced by $1.7
million of federal energy tax credits the Company earned from
building high-efficiency homes, resulting in an effective tax
rate of 24.5%.
Six Months Ended May 31, 2015
-
Total revenues rose to $1.20 billion, up 18% from $1.02 billion in the
year-earlier period.
-
Homes delivered increased 6% to 3,380, compared to 3,193 homes
delivered in the six months ended May 31, 2014.
-
The overall average selling price of $334,200 increased 7% from
$313,200 for the year-earlier period.
-
Homebuilding operating income was $32.3 million, compared to $52.0
million in the corresponding period of 2014.
-
Net income totaled $17.4 million, or $.18 per diluted share, compared
to $37.2 million, or $.40 per diluted share for the year-earlier
period.
-
Income tax expense was $5.8 million versus $.5 million for the six
months ended May 31, 2014, with the 2014 period impacted by the
Company's full deferred tax asset valuation allowance, which was
largely reversed at the end of 2014.
Backlog and Net Orders
-
Potential future housing revenues in backlog grew 57% to $1.61 billion
at May 31, 2015, from $1.03 billion at May 31, 2014, reflecting
substantial year-over-year increases in each of the Company's four
regions. These increases ranged from 38% in its Central region, which
mainly consists of the Company's operations in Texas, to 199% in its
Southwest region.
-
The Company's backlog at May 31, 2015 increased 39% to 4,733
homes, compared to 3,398 homes in backlog at May 31, 2014.
-
The number of homes in backlog and corresponding backlog value at
May 31, 2015 reached their highest second-quarter levels since
2008 and 2007, respectively.
-
The value of net orders generated in the current quarter rose 38% to
$1.05 billion from $763.2 million in the year-earlier period, marking
the Company's 13th consecutive quarter of year-over-year increases.
-
Each of the Company's four regions generated year-over-year growth
in net order value, ranging from 23% in its Central region to 165%
in its Southwest region.
-
Net orders grew 33% to 3,015 in the current quarter, compared to 2,269
in the year-earlier quarter, largely driven by expansion in the
Company's average community count.
-
The cancellation rate as a percentage of gross orders improved to
22% from 28% in the second quarter of 2014, and as a percentage of
beginning backlog was 25% versus 30% a year ago.
-
The Company's overall average community count for the second quarter
increased 30% to 248 from 191 for the year-earlier quarter.
-
The Company ended the current quarter with 261 communities open
for sales, up 35% from 194 communities a year ago. On a sequential
basis, the current quarter ending community count increased 11%
from the first quarter of 2015.
Balance Sheet
-
Cash, cash equivalents and restricted cash increased to $467.1 million
at May 31, 2015, compared to $383.6 million at November 30, 2014,
largely due to proceeds received from a senior notes offering
completed in the 2015 first quarter, partly offset by cash used in
operating activities.
-
The Company's investments in land acquisition and development
totaled $454.7 million for the six months ended May 31, 2015 and
$859.6 million for the corresponding period of 2014.
-
The Company had no cash borrowings outstanding under its $200
million unsecured revolving credit facility at May 31, 2015.
-
Inventories increased to $3.39 billion at May 31, 2015 from $3.22
billion at November 30, 2014, reflecting the Company's investments in
land acquisition and development during the year.
-
At May 31, 2015, the Company maintained a geographically diverse
land pipeline comprised of 49,905 lots, with 41,191 lots owned and
8,714 lots controlled under land option contracts.
-
Notes payable of $2.82 billion at May 31, 2015 rose from $2.58 billion
at November 30, 2014, due to the Company's first quarter underwritten
public issuance of $250 million in aggregate principal amount of
senior notes.
-
Subsequent to the end of the second quarter, on June 15, 2015, the
Company repaid the remaining $199.9 million in aggregate principal
amount of its 6 1/4% senior notes at their maturity.
-
The Company's ratio of debt to capital was 63.6% as of May 31,
2015, compared to 61.8% as of November 30, 2014. The ratio of net
debt to capital was 59.3% at May 31, 2015 and 57.9% at November
30, 2014.
Management Comments
"Our strong net order performance during the spring selling season
underscores the success of our community expansion initiative and the
broad appeal of our products and distinctive home-buying experience, as
well as healthy demand in our served markets," said Jeffrey Mezger,
president and chief executive officer of KB Home. "With the positive
momentum we have generated across our business, we ended the second
quarter with significantly higher backlog levels in each of our four
regions relative to a year ago, providing excellent visibility on our
deliveries and revenues for the remainder of the year. We are confident
that we have the strategic drivers in place to produce measurable
year-over-year earnings growth in the second half of 2015 as we realize
higher revenues from our larger operational platform and anticipate
generating further sequential margin improvement from our recently
opened communities and additional scale as the year progresses."
Earnings Conference Call
The conference call on the second quarter 2015 earnings will be
broadcast live TODAY at 8:30 a.m. Pacific Daylight Time, 11:30 a.m.
Eastern Daylight Time. To listen, please go to the Investor Relations
section of the Company's website at www.kbhome.com.
About KB Home
KB Home is one of the largest and most recognized homebuilding companies
in the United States. Since its founding in 1957, the company has built
more than half a million quality homes. KB Home's unique homebuilding
approach lets each buyer customize their new home from lot location to
floor plan and design features. As a leader in utilizing
state-of-the-art sustainable building practices, all KB homes are highly
energy efficient and meet strict ENERGY STAR® guidelines. This helps to
lower monthly utility costs for homeowners, which the company
demonstrates with its proprietary KB Home Energy Performance Guide®
(EPG®). KB Home has been named an ENERGY STAR Partner of the Year
Sustained Excellence Award winner for five straight years and a
WaterSense® Partner of the Year for four consecutive years. A FORTUNE
1,000 company, Los Angeles-based KB Home was the first homebuilder
listed on the New York Stock Exchange, and trades under the ticker
symbol "KBH." For more information about KB Home, call 888-KB-HOMES,
visit www.kbhome.com,
or connect with KB Home on Facebook.com/KBHome and Twitter.com/KBHome.
Forward-Looking and Cautionary Statements
Certain matters discussed in this press release, including any
statements that are predictive in nature or concern future market and
economic conditions, business and prospects, our future financial and
operational performance, or our future actions and their expected
results are "forward-looking statements" within the meaning of the
Private Securities Litigation Reform Act of 1995. Forward-looking
statements are based on current expectations and projections about
future events and are not guarantees of future performance. We do not
have a specific policy or intent of updating or revising forward-looking
statements. Actual events and results may differ materially from those
expressed or forecasted in forward-looking statements due to a number of
factors. The most important risk factors that could cause our actual
performance and future events and actions to differ materially from such
forward-looking statements include, but are not limited to the
following: general economic, employment and business conditions;
population growth, household formations and demographic trends; adverse
market conditions, including an increased supply of unsold homes,
declining home prices and greater foreclosure and short sale activity,
among other things, that could negatively affect our consolidated
financial statements, including due to additional impairment or land
option contract abandonment charges, lower revenues and operating and
other losses; conditions in the capital, credit and financial markets
(including residential mortgage lending standards, the availability of
residential mortgage financing and mortgage foreclosure rates); material
prices and availability; subcontracted trade labor costs and
availability; changes in interest rates; inflation; our debt level,
including our ratio of debt to capital, and our ability to adjust our
debt level, maturity schedule and structure and to access the equity,
credit, capital or other financial markets or other external financing
sources, including raising capital through the public or private
issuance of common stock, debt or other securities, and/or project
financing, on favorable terms; our compliance with the terms and
covenants of our revolving credit facility; weak or declining consumer
confidence, either generally or specifically with respect to purchasing
homes; competition for home sales from other sellers of new and resale
homes, including lenders and other sellers of homes obtained through
foreclosures or short sales; weather events, significant natural
disasters and other climate and environmental factors, including the
severe prolonged serious drought and related water-constrained
conditions in the southwest United States and California; government
actions, policies, programs and regulations directed at or affecting the
housing market (including the Dodd-Frank Act, tax credits, tax
incentives and/or subsidies for home purchases, tax deductions for
residential mortgage interest payments and property taxes, tax
exemptions for profits on home sales, programs intended to modify
existing mortgage loans and to prevent mortgage foreclosures and the
standards, fees and size limits applicable to the purchase or insuring
of mortgage loans by government-sponsored enterprises and government
agencies), the homebuilding industry, or construction activities;
decisions regarding federal fiscal and monetary policies, including
those relating to taxation, government spending, interest rates and
economic stimulus measures; the availability and cost of land in
desirable areas; our warranty claims experience with respect to homes
previously delivered and actual warranty costs incurred, including our
warranty claims and costs experience at certain of our communities in
Florida; costs and/or charges arising from regulatory compliance
requirements or from legal, arbitral or regulatory proceedings,
investigations, claims or settlements, including unfavorable outcomes in
any such matters resulting in actual or potential monetary damage
awards, penalties, fines or other direct or indirect payments, or
injunctions, consent decrees or other voluntary or involuntary
restrictions or adjustments to our business operations or practices that
are beyond our current expectations and/or accruals; our ability to
use/realize the net deferred tax assets we have generated; our ability
to successfully implement our current and planned strategies and
initiatives with respect to product, geographic and market positioning
(including our efforts to expand our inventory base/pipeline with
desirable land positions or interests at reasonable cost and to expand
our community count, open additional new home communities for sales,
sell higher-priced homes and more design options, increase the size and
value of our backlog, and our operational and investment concentration
in markets in California), revenue growth, asset optimization (including
by effectively balancing home sales prices and sales pace in our new
home communities), asset activation and/or monetization, local field
management and talent investment, containing and leveraging overhead
costs, gaining share in our served markets and increasing our housing
gross profit margins and profitability; consumer traffic to our new home
communities and consumer interest in our product designs and offerings,
particularly from higher-income consumers; cancellations and our ability
to realize our backlog by converting net orders to home deliveries and
revenues; our home sales and delivery performance, particularly in key
markets in California; our ability to generate cash from our operations,
enhance our asset efficiency, increase our operating income margin
and/or improve our return on invested capital; the manner in which our
homebuyers are offered and whether they are able to obtain residential
mortgage loans and mortgage banking services, including from Home
Community Mortgage; the performance of Home Community Mortgage;
information technology failures and data security breaches; and other
events outside of our control. Please see our periodic reports and other
filings with the Securities and Exchange Commission for a further
discussion of these and other risks and uncertainties applicable to our
business.
|
|
|
KB HOME
|
|
CONSOLIDATED STATEMENTS OF OPERATIONS
|
|
For the Six Months and Three Months Ended May 31, 2015 and 2014
|
|
(In Thousands, Except Per Share Amounts — Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Total revenues
|
|
$
|
1,203,090
|
|
|
$
|
1,015,694
|
|
|
$
|
622,969
|
|
|
$
|
565,007
|
|
|
Homebuilding:
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
$
|
1,198,692
|
|
|
$
|
1,010,663
|
|
|
$
|
620,804
|
|
|
$
|
562,396
|
|
|
Costs and expenses
|
|
(1,166,432
|
)
|
|
(958,652
|
)
|
|
(602,942
|
)
|
|
(528,104
|
)
|
|
Operating income
|
|
32,260
|
|
|
52,011
|
|
|
17,862
|
|
|
34,292
|
|
|
Interest income
|
|
255
|
|
|
283
|
|
|
152
|
|
|
115
|
|
|
Interest expense
|
|
(13,456
|
)
|
|
(19,834
|
)
|
|
(8,118
|
)
|
|
(8,558
|
)
|
|
Equity in income (loss) of unconsolidated joint ventures
|
|
(758
|
)
|
|
1,912
|
|
|
(411
|
)
|
|
(678
|
)
|
|
Homebuilding pretax income
|
|
18,301
|
|
|
34,372
|
|
|
9,485
|
|
|
25,171
|
|
|
Financial services:
|
|
|
|
|
|
|
|
|
|
Revenues
|
|
4,398
|
|
|
5,031
|
|
|
2,165
|
|
|
2,611
|
|
|
Expenses
|
|
(1,892
|
)
|
|
(1,704
|
)
|
|
(928
|
)
|
|
(852
|
)
|
|
Equity in income (loss) of unconsolidated joint ventures
|
|
2,365
|
|
|
(12
|
)
|
|
1,951
|
|
|
(6
|
)
|
|
Financial services pretax income
|
|
4,871
|
|
|
3,315
|
|
|
3,188
|
|
|
1,753
|
|
|
Total pretax income
|
|
23,172
|
|
|
37,687
|
|
|
12,673
|
|
|
26,924
|
|
|
Income tax expense
|
|
(5,800
|
)
|
|
(500
|
)
|
|
(3,100
|
)
|
|
(300
|
)
|
|
Net income
|
|
$
|
17,372
|
|
|
$
|
37,187
|
|
|
$
|
9,573
|
|
|
$
|
26,624
|
|
|
Earnings per share:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
$
|
.19
|
|
|
$
|
.43
|
|
|
$
|
.10
|
|
|
$
|
.30
|
|
|
Diluted
|
|
$
|
.18
|
|
|
$
|
.40
|
|
|
$
|
.10
|
|
|
$
|
.27
|
|
|
Weighted average shares outstanding:
|
|
|
|
|
|
|
|
|
|
Basic
|
|
91,974
|
|
|
86,668
|
|
|
91,995
|
|
|
89,529
|
|
|
Diluted
|
|
101,470
|
|
|
96,759
|
|
|
101,544
|
|
|
99,508
|
|
|
|
|
KB HOME
|
|
CONSOLIDATED BALANCE SHEETS
|
|
(In Thousands — Unaudited)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 31,
2015
|
|
November 30,
2014
|
|
Assets
|
|
|
|
|
|
Homebuilding:
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
439,920
|
|
|
$
|
356,366
|
|
Restricted cash
|
|
27,213
|
|
|
27,235
|
|
Receivables
|
|
151,578
|
|
|
125,488
|
|
Inventories
|
|
3,393,672
|
|
|
3,218,387
|
|
Investments in unconsolidated joint ventures
|
|
77,935
|
|
|
79,441
|
|
Deferred tax assets, net
|
|
819,532
|
|
|
825,232
|
|
Other assets
|
|
117,745
|
|
|
114,915
|
|
|
|
5,027,595
|
|
|
4,747,064
|
|
Financial services
|
|
11,465
|
|
|
10,486
|
|
Total assets
|
|
$
|
5,039,060
|
|
|
$
|
4,757,550
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
Homebuilding:
|
|
|
|
|
|
Accounts payable
|
|
$
|
164,614
|
|
|
$
|
172,716
|
|
Accrued expenses and other liabilities
|
|
437,115
|
|
|
409,882
|
|
Notes payable
|
|
2,819,510
|
|
|
2,576,525
|
|
|
|
3,421,239
|
|
|
3,159,123
|
|
Financial services
|
|
1,985
|
|
|
2,517
|
|
Stockholders' equity
|
|
1,615,836
|
|
|
1,595,910
|
|
Total liabilities and stockholders' equity
|
|
$
|
5,039,060
|
|
|
$
|
4,757,550
|
|
|
|
KB HOME
|
|
SUPPLEMENTAL INFORMATION
|
|
For the Six Months and Three Months Ended May 31, 2015 and 2014
|
|
(In Thousands, Except Average Selling Price — Unaudited)
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Homebuilding revenues:
|
|
|
|
|
|
|
|
|
|
Housing
|
|
$
|
1,129,762
|
|
|
$
|
999,942
|
|
|
$
|
604,921
|
|
|
$
|
559,815
|
|
|
Land
|
|
68,930
|
|
|
10,721
|
|
|
15,883
|
|
|
2,581
|
|
|
Total
|
|
$
|
1,198,692
|
|
|
$
|
1,010,663
|
|
|
$
|
620,804
|
|
|
$
|
562,396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Homebuilding costs and expenses:
|
|
|
|
|
|
|
|
|
|
Construction and land costs
|
|
|
|
|
|
|
|
|
|
Housing
|
|
$
|
953,659
|
|
|
$
|
816,208
|
|
|
$
|
508,276
|
|
|
$
|
454,102
|
|
|
Land
|
|
63,169
|
|
|
9,626
|
|
|
16,134
|
|
|
2,458
|
|
|
Subtotal
|
|
1,016,828
|
|
|
825,834
|
|
|
524,410
|
|
|
456,560
|
|
|
Selling, general and administrative expenses
|
|
149,604
|
|
|
132,818
|
|
|
78,532
|
|
|
71,544
|
|
|
Total
|
|
$
|
1,166,432
|
|
|
$
|
958,652
|
|
|
$
|
602,942
|
|
|
$
|
528,104
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Interest expense:
|
|
|
|
|
|
|
|
|
|
Interest incurred
|
|
$
|
94,202
|
|
|
$
|
82,438
|
|
|
$
|
49,199
|
|
|
$
|
43,158
|
|
|
Interest capitalized
|
|
(80,746
|
)
|
|
(62,604
|
)
|
|
(41,081
|
)
|
|
(34,600
|
)
|
|
Total
|
|
$
|
13,456
|
|
|
$
|
19,834
|
|
|
$
|
8,118
|
|
|
$
|
8,558
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Other information:
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization
|
|
$
|
5,560
|
|
|
$
|
4,386
|
|
|
$
|
2,835
|
|
|
$
|
2,319
|
|
|
Amortization of previously capitalized interest
|
|
47,736
|
|
|
37,702
|
|
|
25,443
|
|
|
20,217
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Average selling price:
|
|
|
|
|
|
|
|
|
|
West Coast |
|
$
|
565,500
|
|
|
$
|
532,600
|
|
|
$
|
579,000
|
|
|
$
|
537,900
|
|
|
Southwest
|
|
275,400
|
|
|
281,200
|
|
|
275,800
|
|
|
276,500
|
|
|
Central
|
|
237,900
|
|
|
216,900
|
|
|
237,800
|
|
|
222,000
|
|
|
Southeast
|
|
271,800
|
|
|
252,500
|
|
|
278,800
|
|
|
248,700
|
|
|
Total
|
|
$
|
334,200
|
|
|
$
|
313,200
|
|
|
$
|
338,500
|
|
|
$
|
319,700
|
|
|
|
|
KB HOME
|
|
SUPPLEMENTAL INFORMATION
|
|
For the Six Months and Three Months Ended May 31, 2015 and 2014
|
|
(Dollars in Thousands — Unaudited)
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Homes delivered:
|
|
|
|
|
|
|
|
|
|
West Coast |
|
873
|
|
|
830
|
|
|
459
|
|
|
484
|
|
Southwest
|
|
516
|
|
|
336
|
|
|
279
|
|
|
175
|
|
Central
|
|
1,390
|
|
|
1,360
|
|
|
737
|
|
|
765
|
|
Southeast
|
|
601
|
|
|
667
|
|
|
312
|
|
|
327
|
|
Total
|
|
3,380
|
|
|
3,193
|
|
|
1,787
|
|
|
1,751
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net orders:
|
|
|
|
|
|
|
|
|
|
West Coast |
|
1,322
|
|
|
1,089
|
|
|
770
|
|
|
583
|
|
Southwest
|
|
921
|
|
|
392
|
|
|
532
|
|
|
211
|
|
Central
|
|
2,046
|
|
|
1,842
|
|
|
1,176
|
|
|
1,085
|
|
Southeast
|
|
915
|
|
|
711
|
|
|
537
|
|
|
390
|
|
Total
|
|
5,204
|
|
|
4,034
|
|
|
3,015
|
|
|
2,269
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Six Months
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Net order value:
|
|
|
|
|
|
|
|
|
|
West Coast |
|
$
|
756,311
|
|
|
$
|
643,954
|
|
|
$
|
438,754
|
|
|
$
|
344,671
|
|
Southwest
|
|
258,213
|
|
|
104,900
|
|
|
149,555
|
|
|
56,512
|
|
Central
|
|
535,424
|
|
|
419,354
|
|
|
308,381
|
|
|
250,381
|
|
Southeast
|
|
256,094
|
|
|
195,120
|
|
|
156,176
|
|
|
111,592
|
|
Total
|
|
$
|
1,806,042
|
|
|
$
|
1,363,328
|
|
|
$
|
1,052,866
|
|
|
$
|
763,156
|
|
|
|
|
|
|
|
|
|
|
|
|
|
May 31, 2015 |
|
May 31, 2014 |
|
|
|
Backlog Homes |
|
Backlog Value
|
|
Backlog Homes |
|
Backlog Value
|
|
Backlog data:
|
|
|
|
|
|
|
|
|
|
West Coast |
|
1,042
|
|
|
$
|
617,354
|
|
|
679
|
|
|
$
|
389,402
|
|
Southwest
|
|
729
|
|
|
200,697
|
|
|
244
|
|
|
67,060
|
|
Central
|
|
2,145
|
|
|
558,681
|
|
|
1,830
|
|
|
405,850
|
|
Southeast
|
|
817
|
|
|
234,091
|
|
|
645
|
|
|
163,565
|
|
Total
|
|
4,733
|
|
|
$
|
1,610,823
|
|
|
3,398
|
|
|
$
|
1,025,877
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
KB HOME
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
For
the Six Months and Three Months Ended May 31, 2015 and 2014
(In
Thousands, Except Percentages — Unaudited)
This press release contains, and Company management's discussion of the
results presented in this press release may include, information about
the Company's adjusted housing gross profit margin and ratio of net debt
to capital, both of which are not calculated in accordance with
generally accepted accounting principles ("GAAP"). The Company believes
these non-GAAP financial measures are relevant and useful to investors
in understanding its operations and the leverage employed in its
operations, and may be helpful in comparing the Company with other
companies in the homebuilding industry to the extent they provide
similar information. However, because the adjusted housing gross profit
margin and the ratio of net debt to capital are not calculated in
accordance with GAAP, these financial measures may not be completely
comparable to other companies in the homebuilding industry and,
therefore, should not be considered in isolation or as an alternative to
operating performance and/or financial measures prescribed by GAAP.
Rather, these non-GAAP financial measures should be used to supplement
their respective most directly comparable GAAP financial measures in
order to provide a greater understanding of the factors and trends
affecting the Company's operations.
Adjusted Housing Gross Profit Margin
The following table reconciles the Company's housing gross profit margin
calculated in accordance with GAAP to the non-GAAP financial measure of
the Company's adjusted housing gross profit margin:
|
|
|
|
|
|
|
|
|
Six Months
|
|
Three Months
|
|
|
|
2015
|
|
2014
|
|
2015
|
|
2014
|
|
Housing revenues
|
|
$
|
1,129,762
|
|
|
$
|
999,942
|
|
|
$
|
604,921
|
|
|
$
|
559,815
|
|
|
Housing construction and land costs
|
|
(953,659
|
)
|
|
(816,208
|
)
|
|
(508,276
|
)
|
|
(454,102
|
)
|
|
Housing gross profits
|
|
176,103
|
|
|
183,734
|
|
|
96,645
|
|
|
105,713
|
|
|
Add: Amortization of previously capitalized interest
|
|
47,736
|
|
|
37,702
|
|
|
25,443
|
|
|
20,217
|
|
|
Land option contract abandonment charges
|
|
984
|
|
|
790
|
|
|
536
|
|
|
357
|
|
|
Adjusted housing gross profits
|
|
$
|
224,823
|
|
|
$
|
222,226
|
|
|
$
|
122,624
|
|
|
$
|
126,287
|
|
|
Housing gross profit margin as a percentage of housing revenues
|
|
15.6
|
%
|
|
18.4
|
%
|
|
16.0
|
%
|
|
18.9
|
%
|
|
Adjusted housing gross profit margin as a percentage of housing
revenues
|
|
19.9
|
%
|
|
22.2
|
%
|
|
20.3
|
%
|
|
22.6
|
%
|
Adjusted housing gross profit margin is a non-GAAP financial measure,
which the Company calculates by dividing housing revenues less housing
construction and land costs excluding amortization of previously
capitalized interest and land option contract abandonment charges
recorded during a given period, by housing revenues. The most directly
comparable GAAP financial measure is housing gross profit margin. The
Company believes adjusted housing gross profit margin is a relevant and
useful financial measure to investors in evaluating the Company's
performance as it measures the gross profits the Company generated
specifically on the homes delivered during a given period. This non-GAAP
financial measure isolates the impact that the amortization of
previously capitalized interest and land option contract abandonments
have on housing gross profit margins and allows investors to make
comparisons with the Company's competitors that adjust housing gross
profit margins in a similar manner. The Company also believes investors
will find adjusted housing gross profit margin relevant and useful
because it represents a profitability measure that may be compared to a
prior period without regard to variability of the amortization of
previously capitalized interest and land option contract abandonment
charges. This financial measure assists management in making strategic
decisions regarding product mix, product pricing and construction pace.
KB HOME
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In
Thousands, Except Percentages — Unaudited)
Ratio of Net Debt to Capital
The following table reconciles the Company's ratio of debt to capital
calculated in accordance with GAAP to the non-GAAP financial measure of
the Company's ratio of net debt to capital:
|
|
|
|
|
|
|
|
|
May 31,
|
|
November 30,
|
|
|
|
2015
|
|
2014
|
|
Notes payable
|
|
$
|
2,819,510
|
|
|
$
|
2,576,525
|
|
|
Stockholders' equity
|
|
1,615,836
|
|
|
1,595,910
|
|
|
Total capital
|
|
$
|
4,435,346
|
|
|
$
|
4,172,435
|
|
|
Ratio of debt to capital
|
|
63.6
|
%
|
|
61.8
|
%
|
|
|
|
|
|
|
|
Notes payable
|
|
$
|
2,819,510
|
|
|
$
|
2,576,525
|
|
|
Less: Cash and cash equivalents and restricted cash
|
|
(467,133
|
)
|
|
(383,601
|
)
|
|
Net debt
|
|
2,352,377
|
|
|
2,192,924
|
|
|
Stockholders' equity
|
|
1,615,836
|
|
|
1,595,910
|
|
|
Total capital
|
|
$
|
3,968,213
|
|
|
$
|
3,788,834
|
|
|
Ratio of net debt to capital
|
|
59.3
|
%
|
|
57.9
|
%
|
The ratio of net debt to capital is a non-GAAP financial measure, which
the Company calculates by dividing notes payable, net of homebuilding
cash and cash equivalents and restricted cash, by capital (notes
payable, net of homebuilding cash and cash equivalents and restricted
cash, plus stockholders' equity). The most directly comparable GAAP
financial measure is the ratio of debt to capital. The Company believes
the ratio of net debt to capital is a relevant and useful financial
measure to investors in understanding the leverage employed in the
Company's operations.
View source version on businesswire.com: http://www.businesswire.com/news/home/20150619005118/en/
KB Home
Katoiya Marshall, Investor Relations Contact
(310)
893-7446
kmarshall@kbhome.com
or
Susan
Martin, Media Contact
(310) 231-4142
smartin@kbhome.com
Source: KB Home
News Provided by Acquire Media