News

07.25.12

PulteGroup Reports Second Quarter 2012 Financial Results

- Q2 Net Income of $42 Million, or $0.11 Per Share
- Company Remains on Track for Full-Year Profitability
- 32% Increase in Net New Orders to 5,578 Homes Realized from 7% Fewer Communities
- Adjusted Gross Margin of 20.3% Increased 320 Basis Points from Prior Year and 160 Basis Points from Q1 2012
- Unit Backlog Up 31% to 7,560 Homes Valued at $2.2 Billion
- Quarter-End Cash of $1.4 Billion, an Increase of $96 Million from Q1 2012

BLOOMFIELD HILLS, Mich., July 26, 2012 /PRNewswire/ -- PulteGroup, Inc. (NYSE: PHM) announced today financial results for its second quarter ended June 30, 2012.  For the quarter, the Company reported net income of $42 million, or $0.11 per share, inclusive of land and restructuring charges totaling $8 million, or $0.02 per share.  In the prior year, the Company reported a net loss of $55 million, or $0.15 per share, inclusive of $41 million, or $0.11 per share, of land, mortgage, restructuring and debt repurchase charges.      

"Our second quarter results showed significant gains as homebuilding operating margins expanded by more than 600 basis points, net income improved by $98 million and we continued to benefit from our strategic pricing strategies, improved construction efficiencies and further reductions in finished spec home inventory," said Richard J. Dugas, Jr. , Chairman, President and Chief Executive Officer of PulteGroup.  "Ongoing success in the execution of our value creation initiatives, combined with a recovery in new home demand, contributed to gains in overall operating results allowing PulteGroup to realize second quarter profitability and post its strongest financial performance in over five years."

"Consistent with our focus on capital discipline, PulteGroup's 32% increase in second quarter signups were generated from 7% fewer communities.  By using our existing land assets more efficiently, allocating capital more effectively and managing finished spec inventory more tightly, we continue to position the Company to deliver improved long-term returns." 

Mr. Dugas added, "With each passing quarter, we grow more confident that new home demand has found its footing and is moving along a path toward a gradual recovery.  Within this environment, we remain focused on strengthening our local market positions while continuing to implement initiatives designed to increase revenues, expand margins, improve overhead leverage and allocate capital more effectively."  

Second Quarter Results

Revenue from home sales in the second quarter increased 14% from the prior year to $1.0 billion.  Higher revenue for the period was driven by an 8% increase in average selling price to $268,000, combined with a 5% increase in closings to 3,816 homes.

For the quarter, the Company's homebuilding operations generated pretax income of $24 million, compared with a pretax loss of $37 million for the same period last year.  Excluding capitalized interest expense and land-related charges, home sale gross margin for the quarter was 20.3%, an increase of 320 basis points from the prior year and 160 basis points compared with the first quarter of 2012. PulteGroup's second quarter margins benefitted from a favorable mix of home closings and improved pricing, as well as from the Company's value creation initiatives which are focused on capturing greater construction efficiencies and strategic pricing opportunities.    

Homebuilding SG&A expense for the quarter decreased 10% to $124 million, or 12.1% of homebuilding revenue.  SG&A for the prior year period was $138 million, inclusive of $5 million of restructuring costs, or 15.4% of homebuilding revenue.  

Net new orders for the second quarter were 5,578, which is an increase of 32% over the prior year and a sequential gain of 12% from the first quarter of 2012.  The year-over-year increase in signups was generated from 7% fewer communities.  On a unit basis, PulteGroup's quarter-end backlog was up 31% to 7,560 homes with a value of $2.2 billion, compared with a prior year backlog of 5,777 homes with a value of $1.6 billion.

The Company's financial services operations reported second quarter pretax income of $16 million, compared with a prior year pretax loss of $17 million.  Prior year results included a charge of $19 million related to potential loan repurchase obligations.  For the quarter, the Company's financial services operations benefitted from increased loan originations and favorable market conditions which drove higher gains on mortgage sales.  Mortgage capture rate for the quarter was 82% compared with 77% for the same quarter last year.

A conference call discussing PulteGroup's second quarter 2012 results is scheduled for Thursday, July 26, 2012, at 8:30 a.m. Eastern Time.  Interested investors can access the live webcast via PulteGroup's corporate website at http://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," "project," "may," "can," "could," "might," "will" and similar expressions identify forward-looking statements, including statements related to 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; continued volatility in the debt and equity markets; competition within the industries in which PulteGroup operates; the availability and cost of land and other raw materials used by PulteGroup in its homebuilding operations; the impact of any changes to our strategy in responding to continuing adverse conditions in the industry, including any changes regarding our land positions; the availability and cost of insurance covering risks associated with PulteGroup's 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; economic changes nationally or in PulteGroup's 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; 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, 2011, 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 Bloomfield Hills, Mich., is one of America's largest homebuilding companies with operations in approximately 60 markets throughout the country. Through its brand portfolio that includes Centex, Pulte Homes and Del Webb , 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 new homes designed for the way people actually live today. As the most awarded homebuilder in customer satisfaction, PulteGroup brands have consistently ranked among top homebuilders in third-party customer satisfaction studies.

For more information about PulteGroup, Inc. and PulteGroup brands, go to http://www.pultegroupinc.com/; http://www.pulte.com/; http://www.centex.com/; http://www.delwebb.com/.

PulteGroup, Inc.

Consolidated Results of Operations

($000's omitted, except per share data)

(Unaudited)










Three Months Ended


Six Months Ended


June 30,


June 30,


2012


2011


2012


2011

Revenues:








Homebuilding








Home sale revenues

$

1,024,405



$

899,763



$

1,838,191



$

1,682,234


Land sale revenues

8,749



5,068



47,147



6,364



1,033,154



904,831



1,885,338



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