FORESTAR REPORTS FISCAL 2020 FOURTH QUARTER EARNINGS OF $0.50 PER DILUTED SHARE
ARLINGTON, Texas (Business Wire) - November 5, 2020
Forestar Group Inc. ("Forestar") (NYSE: FOR), a leading national residential lot developer, today reported financial results for its fourth quarter ended September 30, 2020. Net income attributable to Forestar for the fourth quarter of fiscal 2020 increased 91% to $24.2 million, or $0.50 per diluted share, compared to $12.7 million, or $0.30 per diluted share, in the same quarter of fiscal 2019. Revenues for the fourth quarter of fiscal 2020 increased 47% to $347.6 million from $236.3 million in the same quarter of fiscal 2019. Residential lots sold in the quarter increased 108% to 3,977 lots compared to 1,908 lots in the same quarter of fiscal 2019.
Net income attributable to Forestar for the fiscal year ended September 30, 2020 increased 84% to $60.8 million, or $1.26 per diluted share, compared to $33.0 million, or $0.79 per diluted share, in fiscal 2019. Revenues for the fiscal year ended September 30, 2020 increased 118% to $931.8 million from $428.3 million in fiscal 2019. Residential lots sold in the fiscal year ended September 30, 2020 increased 151% to 10,373 lots compared to 4,132 lots sold in fiscal 2019.
The Company's lot position at September 30, 2020 consisted of 60,500 lots, of which 42,400 were owned and 18,100 were controlled through purchase contracts. Of the Company's owned lot position, 30,400 lots, or 72%, were under contract to sell or subject to a right of first offer to D.R. Horton, Inc. ("D.R. Horton") at September 30, 2020.
The Company ended the year with $394.3 million of unrestricted cash and $344.0 million of available borrowing capacity on its senior unsecured revolving credit facility for total liquidity of $738.3 million. Debt at September 30, 2020 totaled $641.1 million, with no senior note maturities until fiscal 2024, and the Company's net debt to total capital ratio was 22.1%. Net debt to total capital consists of debt net of unrestricted cash divided by stockholders’ equity plus debt net of unrestricted cash.
Donald J. Tomnitz, Chairman of the Board, said, "Housing market conditions remain favorable across the country, and Forestar is consolidating market share in the fragmented and under-capitalized U.S. lot development industry. The Forestar team achieved a strong fiscal 2020 with over 10,000 lot deliveries, and we now expect to deliver between 13,000 and 13,500 lots in fiscal 2021.
“Forestar's return-focused business model is centered on our high turnover, lower risk lot manufacturing strategy, and we are well positioned to effectively operate through changing economic conditions due to our low net leverage and strong liquidity position, our low overhead model and our strategic relationship with D.R. Horton, the nation’s largest homebuilder. With approximately 60,500 lots owned and controlled at September 30, 2020, we expect continued robust growth in the coming years."
During the latter part of March 2020, the impacts of the COVID-19 pandemic (C-19) and the related widespread reductions in economic activity began to temporarily affect the Company’s business operations and the demand for its residential lots. However, residential construction is designated an essential business as part of critical infrastructure in almost all municipalities across the U.S. where Forestar operates. The Company implemented operational protocols to comply with social distancing and other health and safety standards as required by federal, state and local government agencies, taking into consideration guidelines of the Centers for Disease Control and Prevention and other public health authorities.
The Company remains cautious as to the impact C-19 may have on its operations and on the overall economy in the future. There is significant uncertainty regarding the extent to which and how long C-19 and its related effects will have on the U.S. economy, capital markets and demand for the Company's lots. The extent to which C-19 impacts Forestar's operational and financial performance will depend on future developments, including the duration and spread of C-19 and the impact on the Company's customers, trade partners and employees, all of which are highly uncertain and cannot be predicted.
Conference Call and Webcast Details
The Company will host a conference call today (Thursday, November 5) at 5:00 p.m. Eastern Time. The dial-in number is 877-407-9205, and the call will also be webcast from the Company’s website at investor.forestar.com.
The following information was filed by Forestar Group Inc. (FOR) on Thursday, November 5, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-K Annual Report statement of earnings and operation as management may choose to highlight particular information in the press release.