LOS ANGELES--(BUSINESS WIRE)--
KB Home (NYSE:KBH), today announced it has begun a transition out of the
Metro Washington D.C. market that is expected to be completed over the
next 12 months. The company plans to continue constructing and
delivering homes in the communities it currently has in this market,
which represents approximately 2% of the company's overall community
count. The company also has other land holdings in this market that it
primarily intends to build out or sell. In keeping with its commitment
to customer service, the company will maintain a dedicated team to
provide warranty services and related support to its homebuyers in the
Metro Washington D.C. area.
In connection with the transition, the company expects to record a
largely non-cash, pretax charge in its 2016 second quarter of between $6
million and $8 million.
"Companywide, one of our objectives is to build large businesses in our
served markets, which provides us with competitive advantages, from
acquiring and developing land, to selling and building homes. We entered
the Metro D.C. region late in the previous housing cycle, and have not
been able to establish the scale necessary to generate solid returns,"
said Jeffrey Mezger, president and chief executive officer.
"Based on our evaluation of opportunities to drive long-term stockholder
value, we are reallocating our resources to more productively deploy our
assets to markets where we have a larger, established presence and
believe we can generate stronger returns," concluded Mezger.
For more information about KB Home, visit www.kbhome.com
or call 888-KB-HOMES.
About KB Home
KB Home is one of the largest and most recognized homebuilders in the
United States and an industry leader in sustainability, building
innovative and highly energy- and water-efficient new homes. Founded in
1957 and the first NYSE-listed homebuilder (ticker symbol: KBH), the
company has built nearly 600,000 homes for families from coast to coast.
Distinguished by its personalized homebuilding approach, KB Home lets
each buyer choose their lot location, floor plan, décor choices, design
features and other special touches that matter most to them. To learn
more about KB Home, call 888-KB-HOMES, visit www.kbhome.com
or connect on Facebook.com/KBHome or 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; trade 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; volatility in the market price of our common stock; 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 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 communities for sales, sell
higher-priced homes and more design studio 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 communities), asset activation and/or monetization,
local field management and talent investment, containing and leveraging
overhead costs, gaining share and scale 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.
View source version on businesswire.com: http://www.businesswire.com/news/home/20160512006523/en/
KB Home
Jill Peters, Investors
310-893-7456
jpeters@kbhome.com
or
Susan
Martin, Media
310-231-4142
smartin@kbhome.com
Source: KB Home
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