FORESTAR GROUP INC. Investor Presentation | |
Q1 | 22 |
FORWARD‑LOOKING STATEMENTS
This presentation may include "forward-looking statements" as defined by the Private Securities Litigation Reform Act of 1995. Although Forestar believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. Factors that may cause the actual results to be materially different from the future results expressed by the forward-looking statements include, but are not limited to: the effect of D.R. Horton's controlling level of ownership on us and the holders of our securities; our ability to realize the potential benefits of the strategic relationship with D.R. Horton; the effect of our strategic relationship with D.R. Horton on our ability to maintain relationships with our customers; the impact of COVID-19 on the economy and our business; the cyclical nature of the homebuilding and lot development industries and changes in economic, real estate and other conditions; the impacts of weather conditions and natural disasters; health and safety incidents relating to our operations; supply shortages and other risks of acquiring land, construction materials and skilled labor; competitive conditions in our industry; our ability to achieve our strategic initiatives; continuing liabilities related to assets that have been sold; the impact of governmental policies, laws or regulations and actions or restrictions of regulatory agencies; the cost and availability of property suitable for residential lot development; general economic, market or business conditions where our real estate activities are concentrated; our dependence on relationships with national, regional and local homebuilders; our ability to obtain or the availability of surety bonds to secure our performance related to construction and development activities and the pricing of bonds; obtaining reimbursements and other payments from governmental districts and other agencies and timing of such payments; our ability to succeed in new markets; the conditions of the capital markets and our ability to raise capital to fund expected growth; our ability to manage and service our debt and comply with our debt covenants, restrictions and limitations; the volatility of the market price and trading volume of our common stock; our ability to hire and retain key personnel; the impact of significant inflation, higher interest rates or deflation; and the strength of our information technology systems and the risk of cybersecurity breaches and our ability to satisfy privacy and data protection laws and regulations. Additional information about issues that could lead to material changes in performance is contained in Forestar's annual report on Form 10-K, which is filed with the Securities and Exchange Commission.
In addition to providing results that are determined in accordance with GAAP, we present EBITDA and Adjusted EBITDA, which are non-GAAP financial measures. These measures are not considered measures of financial performance or liquidity under GAAP, and the items excluded therefrom are significant components in understanding and assessing our financial performance or liquidity. These measures should not be considered in isolation or as alternatives to GAAP measures such as net income attributable to Forestar Group Inc., cash provided by or used in operating, investing or financing activities or other financial statement data presented in the financial statements as an indicator of our financial performance or liquidity.
Non-GAAP financial measures as reported by us may not be comparable to similarly titled metrics reported by other companies and may not be calculated in the same manner. These measures have limitations as analytical tools, and you should not consider them in isolation or as substitutes for analysis of our results as reported under GAAP. Reconciliations of such non-GAAP measures to the most directly comparable GAAP measure and calculations of the non-GAAP measures are set forth in the appendix of this presentation.
2
FORESTAR OVERVIEW
Forestar Group Inc. ("Forestar" or "FOR") is a highly differentiated, pure-play, residential
lot developer for the affordably- priced single-family home market
Operations in 55 markets across 23 states(1)
/ FOR markets / states
- As of 12/31/21
RETURNS FOCUSED
PRUDENT
DISCIPLINED
STRATEGIC
EFFICIENT
STRONG LIQUIDITY
LEADERSHIP
Track record of solid operational results with increasing margins
Fully-entitled projects with short durations
Invest capital across a diverse, national footprint which mitigates risk
Strong relationship with D.R. Horton, the nation's largest homebuilder
Scaling quickly while maintaining a low overhead model
Balance sheet provides financial and operational flexibility
Proven management team with significant land development experience
3
Q1 FY 2022 FINANCIAL HIGHLIGHTS
Compelling growth story with increasing profitability
- Delivered 4,516 residential lots, an increase of 27%
- Net income increased 84% to $41 million
- Pre-taxincome increased 83% to $54 million
- 7th consecutive quarter of return on equity (ROE) improvement(1)
Revenue
$408
$307
33%
Q1 FY 2021 | Q1 FY 2022 |
Pre-tax Profit Margin
13.1%
9.5%
360 | bps |
Q1 FY 2021 | Q1 FY 2022 |
Diluted EPS
$0.81
$0.46
76%
Q1 FY 2021 | Q1 FY 2022 |
$ in millions
Note: All comparisons are to the prior year period
(1) ROE is calculated as net income attributable to Forestar for the trailing twelve months divided by average stockholders' equity, where average stockholders' equity is the4 sum of ending stockholders' equity balances of the trailing five quarters divided by five
TRACK RECORD OF PROFITABILITY AND GROWTH
Forestar is delivering strong growth and consistent margin expansion through the execution of its strategic plan and a disciplined, returns-focused approach to capital allocation
TTM Lot Deliveries | TTM Revenue | ||||||||
16,864 | $1,426 | ||||||||
15,915 | $1,326 | ||||||||
14,990 | $1,255 | ||||||||
13,155 | $1,120 | ||||||||
11,518 | |||||||||
$992 | |||||||||
12/31/20 | 3/31/21 | 6/30/21 | 9/30/21 | 12/31/21 | 12/31/20 | 3/31/21 | 6/30/21 | 9/30/21 | 12/31/21 |
TTM Pre-Tax Income and Margin(1) | TTM Net Income and ROE(2) |
Pre-Tax Income (adjusted) | Pre-Tax Margin (adjusted) | Net Income | ROE | ||||||
$165 | $189 | $129 | |||||||
$138 | $110 | ||||||||
$109 | 12.4% | 13.3% | $85 | $90 | 11.7% | 13.2% | |||
$85 | $66 | ||||||||
11.0% | |||||||||
10.0% | |||||||||
9.6% | |||||||||
9.7% | |||||||||
8.6% | |||||||||
7.7% | |||||||||
12/31/20 | 3/31/21 | 6/30/21 | 9/30/21 | 12/31/21 | 12/31/20 | 3/31/21 | 6/30/21 | 9/30/21 | 12/31/21 |
$ in millions
(1) Excludes the pre-tax loss on extinguishment of debt of $18.1 million related to the 3Q FY 2021 refinancing of the Company's 8.00% senior notes due in 2024
(2) Includes the pre-tax loss on extinguishment of debt of $18.1 million related to the 3Q FY 2021 refinancing of the Company's 8.00% senior notes due in 2024. ROE is5 calculated as net income attributable to Forestar for the trailing twelve months divided by average stockholders' equity, where average stockholders' equity is the sum of
ending stockholders' equity balances of the trailing five quarters divided by five
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Forestar Group Inc. published this content on 27 January 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 27 January 2022 22:55:03 UTC.
