Forestar (FOR)2024-10-29 20:07Financial Data and Key Metrics Changes - Fiscal 2024 diluted earnings per share increased 20% to 270.1 million [7] - Net income for the fourth quarter increased 13% to 1.60 per diluted share, while for the year, net income increased 22% to 551.4 million, flat with the prior year quarter, while total revenue for fiscal 2024 was 31.47 [7][23] Business Line Data and Key Metrics Changes - Lots sold during the fourth quarter increased 8% to 5,374 lots, and for the year, lots sold increased 7% to 15,068 lots [11] - Average lot sales price for the quarter was 96,600 for the year [11] - Gross profit margin for the fourth quarter was 23.9%, up 290 basis points from a year ago, and for the year, it was 23.8%, up 260 basis points [12] Market Data and Key Metrics Changes - The supply of new and existing homes at affordable price points remains limited, with favorable demographic support for housing demand despite elevated mortgage interest rates [16] - Availability of contractors and necessary materials has improved, but overall development costs have not decreased [17] Company Strategy and Development Direction - The company plans to continue executing its strategic plan by investing for future growth, maximizing returns, and consolidating market share in the lot development industry [9] - Forestar aims to double its market share to 5% over the intermediate term while maintaining a disciplined approach to capital investment [27] Management's Comments on Operating Environment and Future Outlook - Management noted that governmental delays continue to extend cycle times above historical norms, impacting development timelines [17] - For fiscal 2025, the company expects to deliver between 16,000 and 16,500 lots and generate 1.65 billion in revenue [26] Other Important Information - The company invested approximately 2 billion in fiscal 2025 [20] - The company ended the quarter with approximately 480 million [22] Q&A Session Summary Question: Will the percentage of lots delivered to customers other than D.R. Horton grow in '25? - Management expects to stay at around 85% to 90% of lots going to Horton in the near term [29] Question: What are the current cycle times for land development? - Cycle times for grading typically take about 120 days, with overall development timelines extending due to government approvals [32] Question: Are there any markets that are oversupplied or where the company may pull back from new land acquisition? - Management does not see any buildup in inventory in affordable price points and customer demand remains robust across the country [40] Question: What is the constraint to growth given the increase in lots under contract with D.R. Horton? - The constraint is the lengthy process from identifying land to getting it developed and finished [55] Question: What is the range of time frames in developing lots from acquisition? - Development timelines can range from six months to 24 months depending on various factors [56]