Forestar Reports Fiscal 2025 Second Quarter Results
Fiscal 2025 Second Quarter Highlights
All comparisons to the prior year quarter
-
Net income totaled
$31.6 million $0.62 -
Pre-tax income of
$40.7 million -
Consolidated revenues increased
5% to$351.0 million -
Residential lots sold increased
4% to 3,411 lots - Owned and controlled 105,900 lots at March 31, 2025
-
Return on equity of
10.7% for the trailing twelve months ended March 31, 2025 -
Book value per share increased
11% to$32.36 -
Issued
$500 million 6.50% senior unsecured notes due 2033 -
Completed a tender offer to purchase
$329.4 million 3.85% senior unsecured notes due 2026
Financial Results
Net income for the second quarter of fiscal 2025 decreased
For the six months ended March 31, 2025, net income decreased
The Company’s return on equity was
Operational Results
Lots sold during the second quarter increased
Lots sold during the six months ended March 31, 2025 decreased
The Company’s lot position at March 31, 2025 was 105,900 lots, of which 68,400 were owned and 37,500 were controlled through land and lot purchase contracts. Lots owned at March 31, 2025 included 9,500 that were fully developed. Of the Company’s owned lot position at March 31, 2025, 25,400 lots, or
Capital Structure, Leverage and Liquidity
Forestar ended the quarter with
Debt at March 31, 2025 totaled
Outlook
Donald J. Tomnitz, Chairman of the Board, said, “The Forestar team delivered increased revenues and lot deliveries compared to the prior year quarter and further strengthened its balance sheet by increasing liquidity and extending the Company’s debt maturity profile. However, home affordability constraints and declining consumer confidence continue to impact the pace of new home sales, resulting in a slower than expected start to the spring selling season.
“Based on our fiscal year-to-date results and current market conditions, we are updating our guidance for fiscal 2025. We now expect to deliver between 15,000 and 15,500 lots generating
“Forestar is uniquely positioned to consistently provide essential finished lots to the homebuilding industry. Our strong balance sheet and liquidity give us the flexibility to operate effectively through changing market conditions. We expect to continue aggregating significant market share, supported by our substantial operating platform, strategic relationship with D.R. Horton and
Conference Call and Webcast Details
The Company will host a conference call today (Thursday, April 17) at 11:00 a.m. Eastern Time. The dial-in number is 888-506-0062, the entry code is 865137, and the call will also be webcast from the Company’s website at investor.forestar.com.
Third Quarter Conference Call
The Company plans to release financial results for its third quarter ended June 30, 2025 on Tuesday, July 22, 2025 before the market opens. The Company will host a conference call that morning at 11:00 a.m. Eastern Time. Details on how to access the conference call will be available at a later date.
About Forestar Group Inc.
Forestar Group Inc. is a residential lot development company with operations in 65 markets and 24 states. Based in
Forward-Looking Statements
Portions of this document may constitute “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. All forward-looking statements are based upon information available to Forestar on the date this release was issued. Forestar does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements in this release include we now expect to deliver between 15,000 and 15,500 lots, generating
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 cyclical nature of the homebuilding and lot development industries and changes in economic, real estate and other conditions; the impact of significant inflation, higher interest rates or deflation; supply shortages and other risks of acquiring land, construction materials and skilled labor; the effects of public health issues such as a major epidemic or pandemic; the impacts of weather conditions and natural disasters; health and safety incidents relating to our operations; 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; the impact of governmental policies, laws or regulations and actions or restrictions of regulatory agencies; our ability to achieve our strategic initiatives; continuing liabilities related to assets that have been sold; 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; competitive conditions in our industry; 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; 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 and its most recent quarterly report on Form 10-Q, both of which are or will be filed with the Securities and Exchange Commission.
FORESTAR GROUP INC. |
||||||
Consolidated Balance Sheets |
||||||
(Unaudited) |
||||||
|
March 31, 2025 |
|
September 30, 2024 |
|||
|
(In millions, except share data) |
|||||
ASSETS |
|
|
|
|||
Cash and cash equivalents |
$ |
174.3 |
|
$ |
481.2 |
|
Real estate |
|
2,759.4 |
|
|
2,266.2 |
|
Investment in unconsolidated ventures |
|
— |
|
|
0.3 |
|
Property and equipment, net |
|
7.1 |
|
|
7.1 |
|
Other assets |
|
101.9 |
|
|
85.3 |
|
Total assets |
$ |
3,042.7 |
|
$ |
2,840.1 |
|
LIABILITIES |
|
|
|
|||
Accounts payable |
$ |
70.0 |
|
$ |
85.9 |
|
Accrued development costs |
|
122.9 |
|
|
144.6 |
|
Earnest money on sales contracts |
|
212.1 |
|
|
172.3 |
|
Deferred tax liability, net |
|
74.9 |
|
|
67.5 |
|
Accrued expenses and other liabilities |
|
44.4 |
|
|
68.3 |
|
Debt |
|
872.5 |
|
|
706.4 |
|
Total liabilities |
|
1,396.8 |
|
|
1,245.0 |
|
EQUITY |
|
|
|
|||
Common stock, par value |
|
50.8 |
|
|
50.7 |
|
Additional paid-in capital |
|
667.8 |
|
|
665.2 |
|
Retained earnings |
|
926.3 |
|
|
878.2 |
|
Stockholders' equity |
|
1,644.9 |
|
|
1,594.1 |
|
Noncontrolling interests |
|
1.0 |
|
|
1.0 |
|
Total equity |
|
1,645.9 |
|
|
1,595.1 |
|
Total liabilities and equity |
$ |
3,042.7 |
|
$ |
2,840.1 |
|
FORESTAR GROUP INC. |
||||||||||||||||
Consolidated Statements of Operations |
||||||||||||||||
(Unaudited) |
||||||||||||||||
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|||||||||||||
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|||||||||
|
(In millions, except per share amounts) |
|||||||||||||||
Revenues |
$ |
351.0 |
|
|
$ |
333.8 |
|
|
$ |
601.3 |
|
|
$ |
639.7 |
|
|
Cost of sales |
|
271.8 |
|
|
|
250.7 |
|
|
|
467.2 |
|
|
|
483.7 |
|
|
Selling, general and administrative expense |
|
38.4 |
|
|
|
29.2 |
|
|
|
74.3 |
|
|
|
57.2 |
|
|
Equity in earnings of unconsolidated ventures |
|
— |
|
|
|
— |
|
|
|
(0.6 |
) |
|
|
— |
|
|
Interest and other income |
|
(1.0 |
) |
|
|
(5.0 |
) |
|
|
(3.3 |
) |
|
|
(11.3 |
) |
|
Loss on extinguishment of debt |
|
1.1 |
|
|
|
— |
|
|
|
1.1 |
|
|
|
— |
|
|
Income before income taxes |
|
40.7 |
|
|
|
58.9 |
|
|
|
62.6 |
|
|
|
110.1 |
|
|
Income tax expense |
|
9.1 |
|
|
|
13.9 |
|
|
|
14.5 |
|
|
|
26.9 |
|
|
Net income |
$ |
31.6 |
|
|
$ |
45.0 |
|
|
$ |
48.1 |
|
|
$ |
83.2 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Basic net income per common share |
$ |
0.62 |
|
|
$ |
0.90 |
|
|
$ |
0.95 |
|
|
$ |
1.66 |
|
|
Weighted average number of common shares |
|
50.8 |
|
|
|
50.1 |
|
|
|
50.8 |
|
|
|
50.1 |
|
|
|
|
|
|
|
|
|
|
|||||||||
Diluted net income per common share |
$ |
0.62 |
|
|
$ |
0.89 |
|
|
$ |
0.94 |
|
|
$ |
1.65 |
|
|
Adjusted weighted average number of common shares |
|
51.0 |
|
|
|
50.6 |
|
|
|
51.1 |
|
|
|
50.5 |
|
|
FORESTAR GROUP INC. |
||||||||||||
Revenues, Residential Lots Sold and Lot Position |
||||||||||||
|
|
REVENUES |
||||||||||
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|||||||||
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|||||
|
(In millions) |
|||||||||||
Residential lot sales: |
|
|
|
|
|
|
|
|||||
Development projects |
$ |
338.9 |
|
$ |
323.1 |
|
$ |
579.9 |
|
$ |
626.6 |
|
Lot banking projects |
|
8.0 |
|
|
0.7 |
|
|
13.1 |
|
|
0.7 |
|
Decrease in contract liabilities |
|
— |
|
|
2.1 |
|
|
1.2 |
|
|
2.8 |
|
|
|
346.9 |
|
|
325.9 |
|
|
594.2 |
|
|
630.1 |
|
Deferred development projects |
|
— |
|
|
1.7 |
|
|
— |
|
|
3.0 |
|
|
|
346.9 |
|
|
327.6 |
|
|
594.2 |
|
|
633.1 |
|
Tract sales and other |
|
4.1 |
|
|
6.2 |
|
|
7.1 |
|
|
6.6 |
|
Total revenues |
$ |
351.0 |
|
$ |
333.8 |
|
$ |
601.3 |
|
$ |
639.7 |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
|
RESIDENTIAL LOTS SOLD |
|||||||||||
|
Three Months Ended March 31, |
|
Six Months Ended March 31, |
|||||||||
|
2025 |
|
2024 |
|
2025 |
|
2024 |
|||||
Development projects |
|
3,334 |
|
|
3,280 |
|
|
5,625 |
|
|
6,430 |
|
Lot banking projects |
|
77 |
|
|
9 |
|
|
119 |
|
|
9 |
|
|
|
3,411 |
|
|
3,289 |
|
|
5,744 |
|
|
6,439 |
|
|
|
|
|
|
|
|
|
|||||
Average sales price per lot (1) |
$ |
101,700 |
|
$ |
98,400 |
|
$ |
103,200 |
|
$ |
97,400 |
|
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
|
|
|
|||||
|
|
|
|
|
LOT POSITION |
|||||||
|
|
|
|
|
March 31, 2025 |
|
September 30, 2024 |
|||||
Lots owned |
|
|
68,400 |
|
|
57,800 |
||||||
Lots controlled under land and lot purchase contracts |
|
|
37,500 |
|
|
37,300 |
||||||
Total lots owned and controlled |
|
|
105,900 |
|
|
95,100 |
||||||
|
|
|
|
|
|
|
|
|||||
Owned lots under contract to sell to D.R. Horton |
|
|
24,700 |
|
|
20,500 |
||||||
Owned lots under contract to customers other than D.R. Horton |
|
|
700 |
|
|
500 |
||||||
Total owned lots under contract |
|
|
25,400 |
|
|
21,000 |
||||||
|
|
|
|
|
|
|
|
|||||
Owned lots subject to right of first offer with D.R. Horton based on executed purchase and sale agreements |
|
|
19,200 |
|
|
17,200 |
||||||
Owned lots fully developed |
|
|
9,500 |
|
|
6,300 |
||||||
(1) Excludes any impact from change in contract liabilities. |
||||||||||||
View source version on businesswire.com: https://www.businesswire.com/news/home/20250417327456/en/
Chris Hibbetts, 817-769-1860
Vice President of Finance & Investor Relations
InvestorRelations@forestar.com
Source: Forestar Group Inc.
