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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: July 22, 1999
(Date of earliest event reported)
CENTEX CORPORATION
(Exact name of Registrant as specified in its charter)
Nevada 1-6776 75-0778259
(State of Incorporation) (Commission File No.) (I.R.S. Employer
Identification No.)
2728 N. Harwood Street
Dallas, Texas 75201
(Address of principal executive offices) (Zip Code)
Registrant's Telephone Number, Including Area Code: (214) 981-5000
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Item 5. Other Events.
On July 22, 1999, Centex Corporation, a Nevada corporation (the
"Corporation"), announced its first quarter net earnings for the quarter ended
June 30, 1999. A copy of the Corporation's press release announcing these
financial results is attached as Exhibit 99.1 hereto and incorporated by
reference.
Item 7. Financial Statements and Exhibits.
(c) Exhibits
Exhibit No. Description
99.1 Press Release dated July 22, 1999.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this Report to be signed on its behalf by the
undersigned thereunto duly authorized.
CENTEX CORPORATION
August 9, 1999 By: /s/ RAYMOND G. SMERGE
-------------------------------------
Raymond G. Smerge
Executive Vice President, Chief Legal
Officer and Secretary
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INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT NO. DESCRIPTION
- ----------- -----------
<S> <C>
99.1 Press Release dated July 22, 1999.
</TABLE>
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EXHIBIT 99.1
CENTEX REPORTS RECORD FIRST QUARTER RESULTS
DALLAS, July 22/PRNewswire/ -- Centex Corporation (NYSE: CTX - news) today
announced the highest first quarter net earnings in its history for the quarter
ended June 30, 1999, the initial quarter of fiscal 2000.
Net earnings for the quarter this year were $58,436,000, a 21% increase over
last year's quarterly net earnings of $48,161,000. Diluted earnings per share of
$.95 for the quarter this year were 22% higher than earnings per share of $.78
for the same quarter in fiscal 1999. Consolidated revenues for the quarter this
year were $1,372,233,000, 24% higher than $1,110,606,000 for the same quarter in
fiscal 1999.
Through its subsidiaries, Dallas-based Centex ranks among the nation's largest
home builders, mortgage lenders and commercial contractors. The Company also has
operations in investment real estate and owns approximately 62% of publicly held
Centex Construction Products, Inc., which produces and distributes cement,
gypsum wallboard, and concrete and aggregates.
HOME BUILDING
Total operating earnings from Home Building for this year's quarter were $60.1
million, 40% above last year's earnings for the same quarter. Operating earnings
from Centex Homes, the Company's Conventional Homes operation, were $59.1
million for the quarter this year, 45% higher than last year. Operating earnings
from Cavco Industries, Centex's Manufactured Homes operation, net of minority
interest, were $956,000 for the first quarter of fiscal 2000, 58% less than last
year's first quarter results.
Total Home Building revenues for the quarter this year were $802.4 million, a
33% increase over revenues for the same quarter in fiscal 1999. Revenues from
Conventional Homes were $754.6 million for the current quarter, 34% higher than
last year. Centex's Manufactured Homes operation reported revenues of $47.8
million, 13% higher than quarterly revenues a year ago.
Closings of Conventional Homes rose in every region, totaling 3,934 homes for
the current quarter, a 32% increase over closings for the same quarter last
year. Home sales (orders) reached 4,774 units for the quarter this year, 33%
higher than orders for the quarter a year ago. The backlog of Conventional Homes
sold but not closed at June 30, 1999 was 7,612 units, 26% above the June 30,
1998 backlog.
The average sales price for Centex's Conventional Homes was $188,608 for the
quarter this year, 2% higher than the average sales price for the same quarter a
year ago. Per unit operating earnings for the quarter this year reached $15,035,
a 10% improvement over per unit earnings last year. The Conventional Homes
operating margin as a percent of revenues was 7.8% for the first quarter of
fiscal 2000 compared to 7.2% for the same quarter last year, primarily due to
increased closings and continued operating efficiencies.
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Manufactured Homes produced 1,692 units for the current quarter, an 8% increase
over the same quarter a year ago. The Manufactured Homes operating margin as a
percent of revenues, before goodwill amortization, was 8.2% for the current
quarter versus 10.5% a year ago, primarily due to increased material costs and
start-up expenses at Cavco's new Texas plant. Cavco's retail operations incurred
a loss of $817,000 in the current quarter versus a small profit for the same
quarter a year ago, due to expansion costs related to new retail locations.
INVESTMENT REAL ESTATE
For the quarter ended June 30, 1999, Centex's Investment Real Estate operation,
through which all investment property transactions are reported, had operating
earnings of $6.2 million, a 17% decline from the same quarter last year. The
decline for the current quarter was due to fewer land sales, the timing of which
fluctuates from quarter to quarter.
FINANCIAL SERVICES
Operating earnings from Financial Services were $20.7 million for this year's
first quarter, 13% less than earnings for the same quarter last year. Financial
Services revenues of $116.9 million for the current quarter were 17% higher than
quarterly revenues a year ago.
Operating earnings from CTX Mortgage Company (CTX) totaled $17.1 million for the
quarter this year, 19% less than earnings for the same quarter a year ago. "A"
loan originations from CTX totaled 18,318 for the current quarter versus 18,323
originations for the same quarter in fiscal 1999. "Builder" originations for
Centex Homes reached 2,469, 19% higher than last year, while Retail
(third-party) originations of 15,849 were 2% lower than those for the same
quarter a year ago. Loan volume reached $2.45 billion for the current quarter,
4% higher than loan volume for the year ago quarter. CTX's profit per loan of
$936 for this year's quarter was 19% less than per-loan profit for the same
quarter last year, due to a more competitive pricing environment and the delay
in balancing operating costs with current production levels.
CTX's "A" loan applications for this year's quarter totaled 18,994, 1% less than
applications for the quarter last year. First quarter Builder applications were
3,233 this year, 27% higher than last year, while Retail applications declined
5% to 15,761. Refinancing activity in June 1999 returned to a normalized level
of approximately 10% of CTX's total volume compared to substantially higher
levels during most of fiscal 1999.
Centex Home Equity Corporation (CHEC) reported $4.6 million of operating
earnings for the quarter ended June 30, 1999, 55% higher than earnings for the
same quarter last year. CHEC originated 4,839 sub-prime loans during the quarter
this year, a 38% increase over loan originations for the same quarter in fiscal
1999. Loan volume for the quarter this year was $320 million, a 39% improvement
over loan volume for the same quarter a year ago. Per-loan profit reached $942,
13% higher than last year's first quarter profit per loan. CHEC's sub-prime
applications totaled 28,663 for the quarter this year, a 119% improvement over
applications for the year ago quarter.
Centex Finance Company, the manufactured home finance unit, originated 168 loans
during the quarter versus 143 loans for the same quarter last year and had an
operating loss of approximately $977,000, compared to a loss of $453,000 for the
same quarter last year, due to expansion costs.
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CONSTRUCTION PRODUCTS
Operating earnings for Centex Construction Products, Inc. (CXP), net of minority
interest, were a record $21.5 million for the quarter this year, 43% higher than
operating earnings for the same quarter last year. Revenues from CXP were $97.2
million for the quarter this year, 22% higher than the year ago quarter.
CXP's record operating earnings resulted from improved results in each of its
businesses. Pricing and sales volume improved for every product, particularly
pricing for Gypsum Wallboard, which rose 28% over pricing for the same quarter
last year.
CONTRACTING AND CONSTRUCTION SERVICES
Operating earnings from Contracting and Construction Services were a record $5.6
million for the quarter this year, a 60% increase over operating earnings for
the same quarter a year ago, primarily due to higher margins. Revenues from
Contracting and Construction Services were $351.9 million for the quarter this
year, 9% higher than revenues for the same quarter last year.
Centex's Construction Group received an all-time-high $567 million of new
contracts for this year's first quarter, 45% higher than new contracts for the
year ago quarter. The backlog of uncompleted construction contracts at June 30,
1999 was $1.15 billion, 6% less than the contract backlog at June 30, 1998.
OTHER DEVELOPMENTS
During the quarter, Centex became the first U.S. home builder to enter the
United Kingdom housing market with a Centex affiliate's acquisition of London-
based Fairclough Homes, which builds approximately 1,700 homes per year. The
uniquely structured transaction allows Centex to assume management control of
Fairclough without substantial financial exposure during the two year period
ending March 31, 2001 when a $225 million non-interest-bearing note will be
paid. The Fairclough transaction should help launch Centex's previously
announced strategy of developing a substantial presence in the European housing
business.
After the end of the quarter, Centex completed its previously announced
agreement to purchase substantially all of the suburban assets of Chicago- based
Sundance Homes for approximately $50 million in cash. The combined
Centex/Sundance operation, which will produce more than 800 homes annually, will
again make Centex Homes one of the top five residential builders in the Chicago
market and will help the company further expand its presence in the Midwest.
In May, CHEC completed its sixth sub-prime home equity mortgage loan
securitization. The $285 million securitization reflects CHEC's ongoing strategy
to access public sources of capital and CHEC expects to continue to issue
similar securities on a quarterly basis.
In addition, Centex said that its Senior Services Group has completed and opened
its second assisted living facility, called Kensington Cottages by Centex. The
facility is located in League City, Texas, south of Houston. A third Kensington
Cottage is being completed and will open in Amarillo, Texas later this summer.
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OUTLOOK
Centex said its home sales remain strong and closings and margins should
continue to increase. Fiscal 2000 Home Building results should exceed fiscal
1999's record levels. Centex said it also expects record results from its
Construction Products and Contracting and Construction Services operations. The
company noted that although the recent increase in interest rates is beginning
to impact its mortgage originations, Financial Services should report another
very strong year.
Accordingly, Centex said it believes that fiscal 2000 results should surpass the
all-time high levels reported for fiscal 1999.
Safe Harbor Provision. This news release contains forward looking statements
involving risks and uncertainties including but not limited to: increases in
interest rates; business conditions; growth in the home building, financial
services, contracting and construction services industries; the economy in
general; competitive factors; building materials costs; and all others detailed
in the Company's recent SEC reports on Forms 10-K and 10-Q. Centex's actual
future results could differ, perhaps materially, from those disclosed here.
NOTE ATTACHMENTS:
(1) Summary of Consolidated Earnings
(2) Revenues and Earnings by Lines of Business
(3) Housing Activity by Geographic Area
FOR ADDITIONAL INFORMATION, CONTACT AT 214.981.5000:
Laurence E. Hirsch
Chairman and Chief Executive Officer
Sheila Gallagher
Vice President - Corporate Communications
Centex Corporation and Subsidiaries
Summary of Consolidated Earnings
(unaudited)
(dollar amounts in thousands, except per share data)
<TABLE>
<CAPTION>
Quarter Ended
June 30,
1999 1998 Change
<S> <C> <C> <C>
Revenues $1,372,233 $1,110,606 24%
Earnings Before Income Taxes $93,110 $76,722 21%
Net Earnings $58,436 $48,161 21%
Earnings Per Share:
Basic $0.98 $0.81 21%
Diluted $0.95 $0.78 22%
Average Shares Outstanding:
Basic 59,446,165 59,530,844 ---%
Diluted 61,609,291 61,972,545 (1%)
</TABLE>
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Centex Corporation and Subsidiaries
Revenues and Earnings by Lines of Business
(dollars in thousands)
<TABLE>
<CAPTION>
Quarter Ended
June 30,
1999 1998 Change
<S> <C> <C> <C>
Revenues
Home Building:
Conventional Homes $ 754,611 $ 561,194 34%
Manufactured Homes 47,831 42,445 13%
Total Home Building 802,442 603,639 33%
58% 54%
Investment Real Estate 3,807 4,894 (22%)
---% 1%
Financial Services 116,887 100,133 17%
9% 9%
Construction Products 97,180 79,846 22%
7% 7%
Contracting and Construction
Services 351,917 322,094 9%
26% 29%
$ 1,372,233 $1,110,606 24%
Total 100% 100%
Operating Earnings
Home Building:
Conventional Homes $ 59,148 $ 40,668 45%
Manufactured Homes (A) 956 2,269 (58%)
Total Home Building 60,104 42,937 40%
54% 48%
Investment Real Estate 6,159 7,403 (17%)
6% 8%
Financial Services 20,723 23,712 (13%)
18% 26%
Construction Products (A) 21,452 15,044 43%
19% 17%
Contracting and Construction
Services 5,555 3,476 60%
5% 4%
Other, net (1,847) (2,306) 20%
(2%) (3%)
Total Operating Earnings 112,146 90,266 24%
100 100
Corporate General Expenses (7,208) (5,351)
Interest Expense (11,828) (8,193)
Earnings Before Income Taxes $ 93,110 $ 76,722 21%
</TABLE>
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Centex Corporation and Subsidiaries
Housing Activity by Geographic Area
<TABLE>
<CAPTION>
Closings
Quarter Ended June 30,
1999 1998 Change
<S> <C> <C> <C>
West 746 660 13%
Midwest 577 330 75%
East 926 692 34%
Southeast 639 522 22%
Southwest 1,046 778 34%
3,934 2,982 32%
</TABLE>
<TABLE>
<CAPTION>
Sales (Orders) Backlog
1999 1998 Change
<S> <C> <C> <C>
West 999 1,006 (1%)
Midwest 1,623 1,044 55%
East 1,508 1,140 32%
Southeast 1,750 1,209 45%
Southwest 1,732 1,659 4%
7,612 6,058 26%
</TABLE>
<TABLE>
<CAPTION>
Sales (Orders)
Quarter Ended June 30,
1999 1998 Change
<S> <C> <C> <C>
West 824 675 22%
Midwest 865 472 83%
East 1,042 803 30%
Southeast 889 595 49%
Southwest 1,154 1,044 11%
4,774 3,589 33%
</TABLE>
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