PulteGroup, Inc. Reports First Quarter 2021 Financial Results
PulteGroup (NYSE: PHM) reported robust first-quarter results for 2021, with net income of $304 million ($1.13 per share), up from $204 million ($0.74 per share) in the same period last year. Adjusted net income rose to $343 million ($1.28 per share). Home sale revenues reached $2.6 billion, a 17% increase, driven by a 12% rise in homes closed and a $17,000 increase in average sales price to $430,000. The company’s backlog totaled 18,966 homes valued at $8.8 billion. PulteGroup also announced a $1 billion increase in its share repurchase authorization and received an investment-grade rating from S&P.
- Net income increased 48% year-over-year to $304 million.
- Adjusted earnings per share rose 60% to $1.28.
- Home sale revenues grew by 17% to $2.6 billion.
- Net new orders surged by 31% to 9,852 homes.
- Backlog value reached $8.8 billion, up significantly.
- Share repurchase authorization increased by $1 billion.
- Average communities operated decreased by 4% to 837.
PulteGroup, Inc. (NYSE: PHM) announced today financial results for its first quarter ended March 31, 2021. For the quarter, the Company reported net income of
“The year has gotten off to an outstanding start with strong demand across all of our markets and buyer groups which helped drive a
“Gains in our core homebuilding operations and resulting strong cash flows are allowing us to invest in future growth and return funds to shareholders, while helping to generate high returns on equity which increased to
“Along with the important underpinnings of favorable demographics, low interest rates and improving consumer confidence, industry demand is benefiting from increased desire for single family living, the ability for new homes to better meet buyer wants and needs and from a limited supply of new and existing home inventory,” added Marshall. “The need for almost 4 million additional homes as recently estimated by Freddie Mac to meet buyer demand, and expectations for an acceleration in economic growth as the pandemic continues to recede, keep us optimistic about future housing conditions and the opportunity to drive additional gains in our business results.”
First Quarter Financial Results
Home sale revenues for the first quarter totaled
For the first quarter, home sale gross margin increased 180 basis points over the prior year to
Net new orders for the first quarter increased
The Company’s quarter-end backlog totaled 18,966 homes with a value of
First quarter pretax income for PulteGroup’s financial services operations more than tripled over the prior year to
The Company ended the first quarter with
In a separate press release, PulteGroup announced that its Board of Directors approved a
Following the close of the Company’s first quarter, Standard & Poor’s announced that it had upgraded PulteGroup to BBB- citing the Company’s lower debt and strong credit ratios. PulteGroup is now rated investment grade by S&P, Moody’s and Fitch.
Also following quarter end, PulteGroup was ranked among the 2021 Fortune 100 Best Companies to Work For® by Great Place to Work®. This is the first time PulteGroup has been named to this prestigious list. “We are proud to be named a Best Company to Work For and believe this recognition directly reflects the commitment of our people to creating a diverse and inclusive workforce where all of our employees are empowered to bring their best selves to work each day,” said Mr. Marshall.
A conference call to discuss PulteGroup's first quarter results is scheduled for Tuesday, April 27, 2021, at 8:30 a.m. Eastern Time. Interested investors can access the live webcast via PulteGroup's corporate website at www.pultegroup.com.
* The Company's return on equity is calculated as net income for the trailing twelve months divided by average shareholders' equity, where average shareholders' equity is the sum of ending shareholders' equity balances of the trailing five quarters divided by five.
Forward-Looking Statements
This 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,” “plan,” “project,” “may,” “can,” “could,” “might,” "should", “will” and similar expressions identify forward-looking statements, including statements related to any potential impairment charges and the impacts or effects thereof, 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; competition within the industries in which we operate; the availability and cost of land and other raw materials used by us in our homebuilding operations; the impact of any changes to our strategy in responding to the cyclical nature of the industry, including any changes regarding our land positions and the levels of our land spend; the availability and cost of insurance covering risks associated with our 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 which could have a greater impact on our effective tax rate or the value of our deferred tax assets than we anticipate; economic changes nationally or in our 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; our ability to generate sufficient cash flow in order to successfully implement our capital allocation priorities; required accounting changes; terrorist acts and other acts of war; the negative impact of the COVID-19 pandemic on our financial position and ability to continue our Homebuilding or Financial Services activities at normal levels or at all in impacted areas; the duration, effect and severity of the COVID-19 pandemic; the measures that governmental authorities take to address the COVID-19 pandemic which may precipitate or exacerbate one or more of the above-mentioned and/or other risks and significantly disrupt or prevent us from operating our business in the ordinary course for an extended period of time; 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, 2020, 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 Atlanta, Georgia, is one of America’s largest homebuilding companies with operations in more than 40 markets throughout the country. Through its brand portfolio that includes Centex, Pulte Homes, Del Webb, DiVosta Homes, American West and John Wieland Homes and Neighborhoods, 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’s purpose is building incredible places where people can live their dreams.
For more information about PulteGroup, Inc. and PulteGroup’s brands, go to pultegroup.com; www.pulte.com; www.centex.com; www.delwebb.com; www.divosta.com; www.jwhomes.com; and www.americanwesthomes.com. Follow PulteGroup, Inc. on Twitter: @PulteGroupNews.
PulteGroup, Inc.
|
|||||||
|
|||||||
|
Three Months Ended |
||||||
|
March 31, |
||||||
|
2021 |
|
2020 |
||||
Revenues: |
|
|
|
||||
Homebuilding |
|
|
|
||||
Home sale revenues |
$ |
2,596,510 |
|
|
$ |
2,221,503 |
|
Land sale and other revenues |
27,159 |
|
|
18,927 |
|
||
|
2,623,669 |
|
|
2,240,430 |
|
||
Financial Services |
106,122 |
|
|
54,550 |
|
||
Total revenues |
2,729,791 |
|
|
2,294,980 |
|
||
|
|
|
|
||||
Homebuilding Cost of Revenues: |
|
|
|
||||
Home sale cost of revenues |
(1,935,635 |
) |
|
(1,694,865 |
) |
||
Land sale and other cost of revenues |
(24,636 |
) |
|
(15,014 |
) |
||
|
(1,960,271 |
) |
|
(1,709,879 |
) |
||
|
|
|
|
||||
Financial Services expenses |
(39,674 |
) |
|
(34,949 |
) |
||
Selling, general, and administrative expenses |
(271,686 |
) |
|
(263,669 |
) |
||
Loss on debt retirement |
(61,469 |
) |
|
— |
|
||
Goodwill impairment |
— |
|
|
(20,190 |
) |
||
Other expense, net |
(2,639 |
) |
|
(2,524 |
) |
||
Income before income taxes |
394,052 |
|
|
263,769 |
|
||
Income tax expense |
(89,945 |
) |
|
(60,058 |
) |
||
Net income |
$ |
304,107 |
|
|
$ |
203,711 |
|
|
|
|
|
||||
Per share: |
|
|
|
||||
Basic earnings |
$ |
1.14 |
|
|
$ |
0.75 |
|
Diluted earnings |
$ |
1.13 |
|
|
$ |
0.74 |
|
Cash dividends declared |
$ |
0.14 |
|
|
$ |
0.12 |
|
|
|
|
|
||||
Number of shares used in calculation: |
|
|
|
||||
Basic |
265,407 |
|
|
270,000 |
|
||
Effect of dilutive securities |
605 |
|
|
1,218 |
|
||
Diluted |
266,012 |
|
|
271,218 |
|
||
PulteGroup, Inc.
|
|||||||
|
|||||||
|
March 31, 2021 |
|
December 31, 2020 |
||||
|
|
|
|
||||
ASSETS |
|
|
|
||||
|
|
|
|
||||
Cash and equivalents |
$ |
1,579,586 |
|
|
$ |
2,582,205 |
|
Restricted cash |
64,468 |
|
|
50,030 |
|
||
Total cash, cash equivalents, and restricted cash |
1,644,054 |
|
|
2,632,235 |
|
||
House and land inventory |
7,975,211 |
|
|
7,721,798 |
|
||
Land held for sale |
31,796 |
|
|
27,962 |
|
||
Residential mortgage loans available-for-sale |
495,049 |
|
|
564,979 |
|
||
Investments in unconsolidated entities |
39,558 |
|
|
35,562 |
|
||
Other assets |
969,437 |
|
|
923,270 |
|
||
Intangible assets |
158,432 |
|
|
163,425 |
|
||
Deferred tax assets, net |
132,204 |
|
|
136,267 |
|
||
|
$ |
11,445,741 |
|
|
$ |
12,205,498 |
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS’ EQUITY |
|
|
|
||||
|
|
|
|
||||
Liabilities: |
|
|
|
||||
Accounts payable |
$ |
404,564 |
|
|
$ |
511,321 |
|
Customer deposits |
589,634 |
|
|
449,474 |
|
||
Deferred tax liabilities |
110,884 |
|
|
103,548 |
|
||
Accrued and other liabilities |
1,352,629 |
|
|
1,407,043 |
|
||
Financial Services debt |
270,819 |
|
|
411,821 |
|
||
Notes payable |
2,031,937 |
|
|
2,752,302 |
|
||
|
4,760,467 |
|
|
5,635,509 |
|
||
Shareholders' equity |
6,685,274 |
|
|
6,569,989 |
|
||
|
$ |
11,445,741 |
|
|
$ |
12,205,498 |
|
PulteGroup, Inc.
|
|||||||
|
|||||||
|
Three Months Ended |
||||||
|
March 31, |
||||||
|
2021 |
|
2020 |
||||
Cash flows from operating activities: |
|
|
|
||||
Net income |
$ |
304,107 |
|
|
$ |
203,711 |
|
Adjustments to reconcile net income to net cash from operating activities: |
|
|
|
||||
Deferred income tax expense |
11,391 |
|
|
19,955 |
|
||
Land-related charges |
1,368 |
|
|
9,729 |
|
||
Loss on debt retirement |
61,469 |
|
|
— |
|
||
Goodwill impairment |
— |
|
|
20,190 |
|
||
Depreciation and amortization |
17,142 |
|
|
15,149 |
|
||
Share-based compensation expense |
11,630 |
|
|
11,479 |
|
||
Other, net |
(687 |
) |
|
(903 |
) |
||
Increase (decrease) in cash due to: |
|
|
|
||||
Inventories |
(243,947 |
) |
|
(189,364 |
) |
||
Residential mortgage loans available-for-sale |
69,930 |
|
|
145,113 |
|
||
Other assets |
(54,303 |
) |
|
(3,534 |
) |
||
Accounts payable, accrued and other liabilities |
(1,352 |
) |
|
(26,910 |
) |
||
Net cash provided by (used in) operating activities |
176,748 |
|
|
204,615 |
|
||
Cash flows from investing activities: |
|
|
|
||||
Capital expenditures |
(14,752 |
) |
|
(20,139 |
) |
||
Investments in unconsolidated entities |
(8,169 |
) |
|
(663 |
) |
||
Distributions of capital from unconsolidated entities |
5,000 |
|
|
6,500 |
|
||
Business acquisition |
(10,400 |
) |
|
(83,200 |
) |
||
Other investing activities, net |
698 |
|
|
1,706 |
|
||
Net cash provided by (used in) investing activities |
(27,623 |
) |
|
(95,796 |
) |
||
Cash flows from financing activities: |
|
|
|
||||
Repayments of notes payable |
(794,435 |
) |
|
(9,245 |
) |
||
Borrowings under revolving credit facility |
— |
|
|
700,000 |
|
||
Financial Services borrowings (repayments), net |
(141,002 |
) |
|
(56,573 |
) |
||
Stock option exercises |
11 |
|
|
50 |
|
||
Share repurchases |
(153,703 |
) |
|
(95,676 |
) |
||
Cash paid for shares withheld for taxes |
(10,566 |
) |
|
(14,838 |
) |
||
Dividends paid |
(37,611 |
) |
|
(32,740 |
) |
||
Net cash provided by (used in) financing activities |
(1,137,306 |
) |
|
490,978 |
|
||
Net increase (decrease) in cash, cash equivalents, and restricted cash |
(988,181 |
) |
|
599,797 |
|
||
Cash, cash equivalents, and restricted cash at beginning of period |
2,632,235 |
|
|
1,251,456 |
|
||
Cash, cash equivalents, and restricted cash at end of period |
$ |
1,644,054 |
|
|
$ |
1,851,253 |
|
|
|
|
|
||||
Supplemental Cash Flow Information: |
|
|
|
||||
Interest paid (capitalized), net |
$ |
17,368 |
|
|
$ |
14,019 |
|
Income taxes paid (refunded), net |
$ |
15,574 |
|
|
$ |
5,540 |
|
|
|||||||
PulteGroup, Inc.
|
|||||||
|
|||||||
|
Three Months Ended |
||||||
|
March 31, |
||||||
|
2021 |
|
2020 |
||||
HOMEBUILDING: |
|
|
|
||||
Home sale revenues |
$ |
2,596,510 |
|
|
$ |
2,221,503 |
|
Land sale and other revenues |
27,159 |
|
|
18,927 |
|
||
Total Homebuilding revenues |
2,623,669 |
|
|
2,240,430 |
|
||
|
|
|
|
||||
Home sale cost of revenues |
(1,935,635 |
) |
|
(1,694,865 |
) |
||
Land sale and other cost of revenues |
(24,636 |
) |
|
(15,014 |
) |
||
Selling, general, and administrative expenses ("SG&A") |
(271,686 |
) |
|
(263,669 |
) |
||
Loss on debt retirement |
(61,469 |
) |
|
— |
|
||
Goodwill impairment |
— |
|
|
(20,190 |
) |
||
Other expense, net |
(2,539 |
) |
|
(2,474 |
) |
||
Income before income taxes |
$ |
327,704 |
|
|
$ |
244,218 |
|
|
|
|
|
||||
FINANCIAL SERVICES: |
|
|
|
||||
Income before income taxes |
$ |
66,348 |
|
|
$ |
19,551 |
|
|
|
|
|
||||
CONSOLIDATED: |
|
|
|
||||
Income before income taxes |
$ |
394,052 |
|
|
$ |
263,769 |
|
|
|
|
|
||||
|
|
|
|
||||
OPERATING METRICS: |
|
|
|
||||
Gross margin % (a)(b) |
25.5 |
% |
|
23.7 |
% |
||
SG&A % (a) |
(10.5 |
)% |
|
(11.9 |
)% |
||
Operating margin % (a) |
15.0 |
% |
|
11.8 |
% |
||
| (a) | As a percentage of home sale revenues |
|
| (b) | Gross margin represents home sale revenues minus home sale cost of revenues |
PulteGroup, Inc.
|
||||||||
|
||||||||
|
|
Three Months Ended |
||||||
|
|
March 31, |
||||||
|
|
2021 |
|
2020 |
||||
|
|
|
|
|
||||
Home sale revenues |
|
$ |
2,596,510 |
|
|
$ |
2,221,503 |
|
|
|
|
|
|
||||
Closings - units |
|
|
|
|
||||
Northeast |
|
317 |
|
|
310 |
|
||
Southeast |
|
1,054 |
|
|
928 |
|
||
Florida |
|
1,420 |
|
|
1,210 |
|
||
Texas |
|
839 |
|
|
708 |
|
||
Midwest |
|
1,225 |
|
|
1,128 |
|
||
West |
|
1,189 |
|
|
1,089 |
|
||
|
|
6,044 |
|
|
5,373 |
|
||
Average selling price |
|
$ |
430 |
|
|
$ |
413 |
|
|
|
|
|
|
||||
Net new orders - units |
|
|
|
|
||||
Northeast |
|
608 |
|
|
448 |
|
||
Southeast |
|
1,561 |
|
|
1,141 |
|
||
Florida |
|
2,404 |
|
|
1,685 |
|
||
Texas |
|
1,561 |
|
|
1,019 |
|
||
Midwest |
|
1,892 |
|
|
1,509 |
|
||
West |
|
1,826 |
|
|
1,693 |
|
||
|
|
9,852 |
|
|
7,495 |
|
||
Net new orders - dollars |
|
$ |
4,630,317 |
|
|
$ |
3,268,749 |
|
|
|
|
|
|
||||
Unit backlog |
|
|
|
|
||||
Northeast |
|
1,244 |
|
|
727 |
|
||
Southeast |
|
2,847 |
|
|
2,078 |
|
||
Florida |
|
4,638 |
|
|
2,781 |
|
||
Texas |
|
2,921 |
|
|
1,851 |
|
||
Midwest |
|
3,720 |
|
|
2,231 |
|
||
West |
|
3,596 |
|
|
2,961 |
|
||
|
|
18,966 |
|
|
12,629 |
|
||
Dollars in backlog |
|
$ |
8,826,989 |
|
|
$ |
5,583,051 |
|
PulteGroup, Inc.
|
|||||||
|
|||||||
|
Three Months Ended |
||||||
|
March 31, |
||||||
|
2021 |
|
2020 |
||||
MORTGAGE ORIGINATIONS: |
|
|
|
||||
Origination volume |
4,708 |
|
|
3,870 |
|
||
Origination principal |
$ |
1,564,668 |
|
|
$ |
1,213,266 |
|
Capture rate |
88.3 |
% |
|
86.8 |
% |
||
Supplemental Data
|
|||||||
|
|||||||
|
Three Months Ended |
||||||
|
March 31, |
||||||
|
2021 |
|
2020 |
||||
|
|
|
|
||||
Interest in inventory, beginning of period |
$ |
193,409 |
|
|
$ |
210,383 |
|
Interest capitalized |
34,627 |
|
|
39,913 |
|
||
Interest expensed |
(34,684 |
) |
|
(36,871 |
) |
||
Interest in inventory, end of period |
$ |
193,352 |
|
|
$ |
213,425 |
|
PulteGroup, Inc.
Reconciliation of Non-GAAP Financial Measures
(Unaudited)
This report contains information about our operating results reflecting certain adjustments, including net income, diluted earnings per share ("EPS"), operating margin, and debt-to-capital ratio. These measures are considered non-GAAP financial measures under the SEC's rules and should be considered in addition to, rather than as a substitute for, the comparable GAAP financial measures. We believe that reflecting these adjustments provides investors relevant and useful information for evaluating the comparability of financial information presented and comparing our profitability and liquidity to other companies in the homebuilding industry. Although other companies in the homebuilding industry report similar information, the methods used may differ. We urge investors to understand the methods used by other companies in the homebuilding industry to calculate these measures and any adjustments thereto before comparing our measures to those of such other companies.
The following tables set forth a reconciliation of the non-GAAP financial measures to the GAAP financial measures that management believes to be most directly comparable (
Adjusted EPS |
|||||||||
|
|
|
|
|
|
||||
|
|
|
Three Months Ended |
||||||
|
Results of Operations Classification |
|
March 31, |
||||||
|
|
2021 |
|
2020 |
|||||
|
|
|
|
|
|
||||
Net income, as reported |
|
|
$ |
304,107 |
|
|
$ |
203,711 |
|
Adjustments to income before income taxes: |
|
|
|
|
|
||||
Loss on debt retirement |
Loss on debt retirement |
|
61,469 |
|
|
— |
|
||
Insurance benefit |
SG&A |
|
(10,382 |
) |
|
— |
|
||
Goodwill impairment |
Goodwill impairment |
|
— |
|
|
20,190 |
|
||
Income tax effect of the above items |
Income tax expense |
|
(12,435 |
) |
|
(4,967 |
) |
||
Adjusted net income |
|
|
$ |
342,759 |
|
|
$ |
218,934 |
|
|
|
|
|
|
|
||||
EPS (diluted), as reported |
|
|
$ |
1.13 |
|
|
$ |
0.74 |
|
Adjusted EPS (diluted) |
|
|
$ |
1.28 |
|
|
$ |
0.80 |
|
Adjusted Operating Margin |
|||||||||||
|
|
|
|
|
|
|
|||||
|
Three Months Ended |
||||||||||
|
March 31, |
||||||||||
|
2021 |
|
2020 |
||||||||
|
|
|
|
|
|
||||||
Home sale revenues |
$ |
2,596,510 |
|
|
|
$ |
2,221,503 |
|
|
||
|
|
|
|
|
|
||||||
Gross margin (a) |
$ |
660,875 |
|
25.5 |
% |
|
$ |
526,638 |
|
23.7 |
% |
|
|
|
|
|
|
||||||
SG&A, as reported |
$ |
271,686 |
|
10.5 |
% |
|
$ |
263,669 |
|
11.9 |
% |
Insurance benefit |
10,382 |
|
0.4 |
% |
|
— |
— |
% |
|||
Adjusted SG&A |
$ |
282,068 |
|
10.9 |
% |
|
$ |
263,669 |
|
11.9 |
% |
|
|
|
|
|
|
||||||
Operating margin, as reported (b) |
|
15.0 |
% |
|
|
11.8 |
% |
||||
Adjusted operating margin (c) |
|
14.6 |
% |
|
|
11.8 |
% |
||||
(a) |
Gross margin represents home sale revenues minus home sale cost of revenues |
|
(b) |
Operating margin represents gross margin less SG&A |
|
(c) |
Adjusted operating margin represents gross margin less adjusted SG&A |
Debt-to-Capital Ratios |
||||||||
|
|
|
|
|
||||
|
|
March 31, 2021 |
|
December 31, 2020 |
||||
Notes payable |
|
$ |
2,031,937 |
|
|
$ |
2,752,302 |
|
Shareholders' equity |
|
6,685,274 |
|
|
6,569,989 |
|
||
Total capital |
|
$ |
8,717,211 |
|
|
$ |
9,322,291 |
|
Debt-to-capital ratio |
|
23.3 |
% |
|
29.5 |
% |
||
|
|
|
|
|
||||
Notes payable |
|
$ |
2,031,937 |
|
|
$ |
2,752,302 |
|
Less: Total cash, cash equivalents, and restricted cash |
|
(1,644,054 |
) |
|
(2,632,235 |
) |
||
Total net debt |
|
$ |
387,883 |
|
|
$ |
120,067 |
|
Shareholders' equity |
|
6,685,274 |
|
|
6,569,989 |
|
||
Total net capital |
|
$ |
7,073,157 |
|
|
$ |
6,690,056 |
|
Net debt-to-capital ratio |
|
5.5 |
% |
|
1.8 |
% |
||
View source version on businesswire.com: https://www.businesswire.com/news/home/20210427005211/en/
FAQ
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