KB Home, one of the largest home builders in the United States and France, reported record annual revenues of $7.05 billion in 2004, up 21 percent from $5.85 billion in 2003. The growth was driven by a 16 percent increase in unit deliveries to 31,646 this year, up from 27,331 in 2003.
The builder reported annual net income of $480.9 million, up 30 percent from $370.8 million in 2003. Earnings per share rose 30 percent to $11.40 in 2004, from $8.80 last year.
During the fourth quarter, KB Home delivered 10,285 homes, representing a 16 percent increase from the 8,874 homes delivered in the same period last year. Revenues in the fourth quarter reached $2.38 billion, up 27 percent from $1.87 billion in the fourth quarter of 2003, driven by unit delivery growth and an 11 percent increase in the company’s average selling price.
Net income in the fourth quarter rose 35 percent to $186.7 million from $138.7 million during the fourth quarter 2003. The increase was largely due to higher unit volume and an expanded operating margin, the company said.
Diluted earnings per share increased 34 percent to $4.42 in the quarter ended Nov. 30, 2004, up from $3.31 in the year-earlier quarter.
Net orders in the fourth quarter climbed 28 percent to 8,516, up from 6,629 net orders in the year-earlier quarter. Net orders grew in nearly all of KB Home’s U.S. geographic regions and in France. The company’s year-over-year net order growth exceeded 20 percent in every quarter of 2004 and reached its highest level for the year during the fourth quarter.
KB Home’s backlog at Nov. 30, 2004, in both units and dollar value, was the highest of any year-end in the company’s history, driven by substantial growth in all geographic regions. The dollar value of the company’s backlog at Nov. 30 rose 57 percent from year-end 2003 to approximately $4.82 billion, representing a strong pipeline of future revenues for 2005. Unit backlog at Nov. 30 stood at 20,280, representing a 38 percent increase from 14,675 units at the end of the same period last year.
Based on its strong 2004 performance, KB Home raised its 2005 earnings guidance from $14 to $14.50 per diluted share, an anticipated 27 percent increase over this year.
“Each of our five home-building regions posted double-digit increases in fourth-quarter revenues boosting company-wide results to an all-time record for the period,” KB Home Chairman and CEO Bruce Karatz said.
Throughout 2004, the company continued to make strategic investments in its operations to expand its geographic reach. At Nov. 30, 2004, KB Home controlled approximately 160,000 lots in dynamic markets across the U.S. and in France, representing a solid pipeline for continued growth.
KB Home currently operates in West Coast-California; Southwest-Arizona, Nevada and New Mexico; Central-Colorado, Illinois, Indiana and Texas; and Southeast-Florida, Georgia, North Carolina and South Carolina.
Kaufman & Broad S.A., the company’s majority-owned subsidiary, is one of the largest home builders in France. KB Home also operates a full-service mortgage company.
KB Home shares (NYSE: KBH) were trading at $104.59 a share this morning.
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