KB Home : Fourth Quarter 2024 Earnings release
KBH
NEWS RELEASE
KB Home Reports 2024 Fourth Quarter and Full Year
Results
2025-01-13
Revenues Grew 19% to $2.00 Billion; Diluted Earnings Per Share Increased 36% to $2.52
Repurchased $100.0 Million of Common Stock
LOS ANGELES--(BUSINESS WIRE)-- KB Home (NYSE: KBH) today reported results for its fourth quarter and year
ended November 30, 2024.
"We had a strong
earnings per share. Our higher revenues re
Net orders rose roughly 40% year over year, as buyers continued to demonstrate a desire for homeownership and
housing market conditions improved relative to last year, despite ongoing mortgage interest rate headwinds," said
Je
outcome for 2024, as we generated nearly $7.0 billion in total revenues and $8.45 in diluted earnings per share.
Operationally, we executed well, opening 106 new communities, signi
achieving the highest level of customer satisfaction in our Company's history."
"In 2025, we will remain focused on expanding our scale, pro
growth having invested over $2.8 billion in land acquisition and development in 2024, and we plan to increase our
investment again in 2025. These investments will contribute to future community count growth and, together with
our a
meet buyer demand. In addition, as in 2024, during which we returned over $420 million to our shareholders
through both repurchases and dividends, we intend to continue our balanced capital allocation approach,"
concluded Mezger.
Three Months Ended November 30, 2024 (comparisons on a year-over-year basis)
Revenues up 19% to $2.00 billion.
Homes delivered increased 17% to 3,978.
Average selling price rose 3% to $501,000.
Homebuilding operating income increased 27% to $229.1 million. The homebuilding operating income margin
expanded 60 basis points to 11.5%, re
selling, general and administrative expenses ratio. Inventory-related charges totaled $.9 million for the
current quarter and $1.2 million for the year-earlier quarter.
The Company's housing gross pro
above-mentioned inventory-related charges, the housing gross pro
20.8%.
Selling, general and administrative expenses as a percentage of housing revenues improved 50 basis
points to 9.4%, mainly due to increased operating leverage from higher housing revenues.
Financial services pretax income grew 8% to $13.1 million due to increased equity in income of the Company's
mortgage banking joint venture. The mortgage banking joint venture's results re
loan originations, largely due to an increase in the number of homes delivered.
Net income rose 27% to $190.6 million. Diluted earnings per share grew 36% to $2.52, driven by higher net
income and the favorable impact of the Company's common stock repurchases.
The e
Twelve Months Ended November 30, 2024 (comparisons on a year-over-year basis)
Revenues increased 8% to $6.93 billion.
Homes delivered were up 7% to 14,169.
Average selling price rose slightly to $486,900.
Net income grew 11% to $655.0 million.
Diluted earnings per share increased 20% to $8.45.
Backlog and Net Orders (comparisons on a year-over-year basis, except as noted)
Net orders and net order value for the quarter both increased by 41%, reaching 2,688 and $1.32 billion,
respectively. Net order value grew in each of the Company's four regions, with increases ranging from 21% in
the Southwest to 60% in the Central region.
Monthly net orders per community rose to 3.5, compared to 2.7.
The cancellation rate as a percentage of gross orders improved to 17% from 28%.
Ending backlog homes totaled 4,434, compared to 5,510. Ending backlog value was $2.24 billion, compared to
$2.67 billion.
The Company's ending community count grew 7% to 258, and the average community count for the quarter
increased 8% to 256.
Balance Sheet as of November 30, 2024 (comparisons to November 30, 2023, except as
noted)
The Company had total liquidity of $1.68 billion, including $598.0 million of cash and cash equivalents and
$1.08 billion of available capacity under its unsecured revolving credit facility, with no cash borrowings
outstanding.
Inventories grew by $394.4 million, or 8%, to $5.53 billion.
The Company's investments in land and land development for the twelve months ended November 30,
2024 increased 58% to $2.84 billion, compared to $1.80 billion for the year-earlier period.
The Company's lots owned or under contract grew 37% to 76,703, of which approximately 51% were
owned and 49% were under contract. By comparison, approximately 73% of the Company's total lots
were owned and 27% were under contract as of November 30, 2023.
Notes payable of $1.69 billion were approximately the same. The Company's debt to capital ratio improved
130 basis points to 29.4%, compared to 30.7%.
Stockholders' equity increased to $4.06 billion, compared to $3.81 billion, primarily re
income that was partially o
In the 2024 fourth quarter, the Company repurchased 1,264,484 shares of its outstanding common
stock at a cost of $100.0 million, bringing its total repurchases in 2024 to 4,725,181 shares at a cost of
$350.0 million, or $74.07 per share. As of November 30, 2024, the Company had $700.0 million
remaining under its current common stock repurchase authorization.
The total repurchases represented approximately 6% of the Company's outstanding common stock as
of the beginning of the 2024
Based on the Company's 72.2 million outstanding shares as of November 30, 2024, book value per
share of $56.27 expanded 12%.
Return on equity was 16.6%, compared to 15.7%.
Guidance
The Company is providing the following guidance for its 2025 full year:
Housing revenues in the range of $7.00 billion to $7.50 billion.
Average selling price in the range of $488,000 to $498,000.
Homebuilding operating income as a percentage of revenues of approximately 10.7%, assuming no inventory-
related charges.
Housing gross pro
Selling, general and administrative expenses as a percentage of housing revenues in the range of 9.6%
to 10.0%.
E
Ending community count of approximately 250.
The Company plans to also provide guidance for its 2025
Conference Call
The conference call to discuss the Company's 2024 fourth quarter earnings will be broadcast live TODAY at 2:00
p.m. Paci
website at kbhome.com.
About KB Home
KB Home is one of the largest and most trusted homebuilders in the United States. We operate in 47 markets, have
built over 680,000 quality homes in our more than 65-year history, and are honored to be the #1 customer-ranked
national homebuilder based on third-party buyer surveys. What sets KB Home apart is building strong, personal
relationships with every customer and creating an exceptional homebuying experience that o
the ability to personalize their home based on what they value at a price they can a
sustainability, KB Home has achieved one of the highest residential energy-e
ENERGY STAR® certi
information, visit kbhome.com.
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
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 speci
intent of updating or revising forward-looking statements. If we update or revise any such statement(s), no
assumption should be made that we will further update or revise that statement(s) or update or revise any other
such statement(s). Actual events and results may di
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 di
are not limited to the following: general economic, employment and business conditions; population growth,
household formations and demographic trends; conditions in the capital, credit and
access external
and/or project
directors' authorization; material and trade costs and availability, including the greater costs associated with
achieving current and expected higher standards for ENERGY STAR certi
municipal construction, permitting, inspection and utility processes, which have been disrupted by key equipment
shortages; consumer and producer price in
Reserve, which the Federal Reserve may increase to moderate in
available in the capital markets or from
our debt level, including our ratio of debt to capital, and our ability to adjust our debt level and maturity schedule;
our compliance with the terms of our revolving credit facility and our senior unsecured term loan; the ability and
willingness of the applicable lenders and
institutions, to meet their commitments or fund borrowings, extend credit or provide payment guarantees to or for
us under our revolving credit facility or unsecured letter of credit facility; volatility in the market price of our
common stock; home selling prices, including our homes' selling prices, being una
incomes; weak or declining consumer con
competition from other sellers of new and resale homes; weather events, signi
climate and environmental factors, such as a lack of adequate water supply to permit new home communities in
certain areas; any failure of lawmakers to agree on a budget or appropriation legislation to fund the federal
government's operations (also known as a government shutdown), and
to any such failure; potential regulatory instability associated with the upcoming change in the U.S. presidential
administrations; government actions, policies, programs and regulations directed at or a
market (including the tax bene
limits applicable to the purchase or insuring of mortgage loans by government-sponsored enterprises and
government agencies), the homebuilding industry, or construction activities; changes in existing tax laws or enacted
corporate income tax rates, including those resulting from regulatory guidance and interpretations issued with
respect thereto, such as Internal Revenue Service guidance regarding heightened quali
federal tax credits for building energy-e
tari
measures taken by other countries; disruptions in world and regional trade
chains due to the military con
including those stemming from wide-ranging sanctions the U.S. and other countries have imposed or may further
impose on Russian business sectors,
may, among other things, increase our operational costs, exacerbate building materials and appliance shortages
and/or reduce our revenues and earnings; the adoption of new or amended
guidance and/or interpretations with respect thereto; the availability and cost of land in desirable areas and our
ability to timely and e
option contract abandonment or other inventory-related charges, including any stemming from decreases in the
value of our land assets; our warranty claims experience with respect to homes previously delivered and actual
warranty costs incurred; costs and/or charges arising from regulatory compliance requirements, including the costs
to implement recent federal and state climate-related disclosure rules, 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,
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
related to our product, geographic and market positioning, gaining share and scale in our served markets, through,
among other things, our making substantial investments in land and land development, which, in some cases,
involves putting signi
markets; our operational and investment concentration in markets in California; consumer interest in our new
home communities and products, particularly from
ability to generate orders and convert our backlog of orders to home deliveries and revenues, particularly in key
markets in California; our ability to successfully implement our business strategies and achieve any associated
public
compensation; the ability of our homebuyers to obtain homeowners and
lender-required policies for other hazards or events, for their homes, which may depend on the ability and
willingness of insurers or government-funded or -sponsored programs to o
all; the ability of our homebuyers to obtain residential mortgage loans and mortgage banking services, which may
depend on the ability and willingness of lenders and
homebuyers; the performance of mortgage lenders to our homebuyers; the performance of KBHS Home Loans,
LLC ("KBHS"); the ability and willingness of lenders and
fund its originated mortgage loans; information technology failures and data security breaches; an epidemic,
pandemic or signi
federal, state and local governments, agencies, law enforcement and/or health authorities implement to address it,
which may precipitate or exacerbate one or more of the above-mentioned and/or other risks, and signi
disrupt or prevent us from operating our business in the ordinary course for an extended period; widespread
protests and/or civil unrest, whether due to political events, social movements or other reasons; and other events
outside of our control. Please see our periodic reports and other
Commission for a further discussion of these and other risks and uncertainties applicable to our business.
KB HOME
CONSOLIDATED STATEMENTS OF OPERATIONS
For the Three Months and Twelve Months Ended November 30, 2024 and 2023
(In Thousands, Except Per Share Amounts)
Three Months Ended November 30,
Twelve Months Ended November 30,
2024
2023
2024
2023
$
1,999,899
$
1,673,988
$
6,930,086
$
6,410,629
Total revenues
Homebuilding:
Revenues
$
1,993,050
$
1,665,004
$
6,902,239
$
6,381,106
Costs and expenses
(1,763,951)
(1,484,100)
(6,138,331)
(5,662,369)
Operating income
229,099
180,904
763,908
718,737
Interest income and other
2,722
6,071
32,101
13,759
Equity in income (loss) of unconsolidated joint
ventures
2,787
469
6,019
(713)
234,608
187,444
802,028
731,783
Homebuilding pretax income
Financial services:
Revenues
6,849
8,984
27,847
29,523
Expenses
(1,506)
(1,366)
(6,133)
(5,726)
Equity in income of unconsolidated joint venture
7,754
4,540
27,176
15,697
13,097
12,158
48,890
39,494
Financial services pretax income
Total pretax income
247,705
199,602
850,918
771,277
Income tax expense
(57,100)
(49,300)
(195,900)
(181,100)
$
190,605
$
150,302
$
655,018
$
590,177
Net income
Earnings per share:
$
2.59
$
1.91
$
8.70
$
7.25
Basic
$
2.52
$
1.85
$
8.45
$
7.03
Diluted
Weighted average shares outstanding:
72,983
77,986
74,753
80,842
Basic
75,114
80,511
76,955
83,380
Diluted
KB HOME
CONSOLIDATED BALANCE SHEETS
(In Thousands)
November 30,
November 30,
Assets
2024
2023
Homebuilding:
Cash and cash equivalents
$
597,973
$
727,076
Receivables
377,533
366,862
Inventories
5,528,020
5,133,646
Investments in unconsolidated joint ventures
67,020
59,128
Property and equipment, net
90,359
88,309
Deferred tax assets, net
102,421
119,475
Other assets
105,920
96,987
6,869,246
6,591,483
Financial services
66,923
56,879
$
6,936,169
$
6,648,362
Total assets
Liabilities and stockholders' equity
Homebuilding:
Accounts payable
$
384,894
$
388,452
Accrued expenses and other liabilities
796,261
758,227
Notes payable
1,691,679
1,689,898
2,872,834
2,836,577
Financial services
2,719
1,645
Stockholders' equity
4,060,616
3,810,140
$
6,936,169
$
6,648,362
Total liabilities and stockholders' equity
KB HOME
SUPPLEMENTAL INFORMATION
For the Three Months and Twelve Months Ended November 30, 2024 and 2023
(In Thousands, Except Average Selling Price)
Three Months Ended November 30,
Twelve Months Ended November 30,
2024
2023
2024
2023
Homebuilding revenues:
Housing
$
1,993,050
$
1,660,354
$
6,898,667
$
6,370,421
Land
-
4,650
3,572
10,685
$
1,993,050
$
1,665,004
$
6,902,239
$
6,381,106
Total
Homebuilding costs and expenses:
Construction and land costs
Housing
$
1,577,290
$
1,315,935
$
5,449,382
$
5,020,783
Land
-
4,581
2,101
9,492
Subtotal
1,577,290
1,320,516
5,451,483
5,030,275
Selling, general and administrative expenses
186,661
163,584
686,848
632,094
$
1,763,951
$
1,484,100
$
6,138,331
$
5,662,369
Total
Interest expense:
Interest incurred
$
25,977
$
26,477
$
105,642
$
107,086
Interest capitalized
(25,977)
(26,477)
(105,642)
(107,086)
$
-
$
-
$
-
$
-
Total
Other information:
Amortization of previously capitalized interest
$
33,758
$
30,832
$
117,630
$
118,205
9,894
10,283
40,755
39,794
Depreciation and amortization
Average selling price:
West Coast
$
706,300
$
679,400
$
679,300
$
689,800
Southwest
455,600
431,500
453,300
431,200
Central
355,200
381,300
357,800
405,500
Southeast
412,300
405,200
414,600
396,900
$
501,000
$
487,300
$
486,900
$
481,300
Total
KB HOME
SUPPLEMENTAL INFORMATION
For the Three Months and Twelve Months Ended November 30, 2024 and 2023
(Dollars in Thousands)
Three Months Ended November 30,
Twelve Months Ended November 30,
2024
2023
2024
2023
Homes delivered:
West Coast
1,295
1,045
4,316
3,365
Southwest
780
668
2,890
2,699
Central
1,080
1,011
4,051
4,506
Southeast
823
683
2,912
2,666
3,978
3,407
14,169
13,236
Total
Net orders:
West Coast
848
561
3,982
3,623
Southwest
546
471
2,645
2,386
Central
729
466
3,917
2,784
Southeast
565
411
2,549
2,291
2,688
1,909
13,093
11,084
Total
Net order value:
West Coast
$
565,965
$
379,128
$
2,780,631
$
2,423,459
Southwest
257,724
212,791
1,225,604
1,032,334
Central
264,277
165,058
1,427,132
965,994
Southeast
228,687
175,667
1,040,528
924,754
$
1,316,653
$
932,644
$
6,473,895
$
5,346,541
Total
November 30, 2024
November 30, 2023
Backlog data:
Homes
Value
Homes
Value
West Coast
1,211
$
874,364
1,545
$
1,025,381
Southwest
1,134
532,371
1,379
616,717
Central
1,133
436,093
1,267
458,593
Southeast
956
400,079
1,319
566,988
4,434
$
2,242,907
5,510
$
2,667,679
Total
KB HOME
RECONCILIATION OF NON-GAAP FINANCIAL MEASURES
(In Thousands, Except Percentages)
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 pro
accordance with generally accepted accounting principles ("GAAP"). The Company believes this non-GAAP
measure is relevant and useful to investors in understanding 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 it is not calculated in accordance with GAAP, this non-GAAP
completely comparable to other companies in the homebuilding industry and, thus, should not be considered in
isolation or as an alternative to operating performance and/or
non-GAAP
in order to provide a greater understanding of the factors and trends a
Adjusted Housing Gross Pro
The following table reconciles the Company's housing gross pro
non-GAAP
Three Months Ended November 30,
Twelve Months Ended November 30,
2024
2023
2024
2023
Housing revenues
$
1,993,050
$
1,660,354
$
6,898,667
$
6,370,421
Housing construction and land costs
(1,577,290)
(1,315,935)
(5,449,382)
(5,020,783)
Housing gross pro
415,760
344,419
1,449,285
1,349,638
Add: Inventory-related charges (a)
912
1,217
4,597
11,424
$
416,672
$
345,636
$
1,453,882
$
1,361,062
Adjusted housing gross pro
20.9%
20.7%
21.0%
21.2%
Housing gross pro
20.9%
20.8%
21.1%
21.4%
Adjusted housing gross pro
(a) Represents inventory impairment and land option contract abandonment charges associated with housing operations.
Adjusted housing gross pro
housing revenues less housing construction and land costs excluding housing inventory impairment and land
option contract abandonment charges (as applicable) recorded during a given period, by housing revenues. The
most directly comparable GAAP
housing gross pro
performance as it measures the gross pro
given period. This non-GAAP
option contract abandonment charges have on housing gross pro
comparisons with the Company's competitors that adjust housing gross pro
Company also believes investors will
represents a pro
inventory impairment and land option contract abandonment charges. This
in making strategic decisions regarding community location and product mix, product pricing and construction
pace.
For Further Information:
Jill Peters, Investor Relations Contact
Cara Kane, Media Contact
Source: KB Home
Disclaimer
KB Home published this content on January 13, 2025, and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on January 13, 2025 at 21:13:33.811.