After 29 straight years of growth, D.R. Horton's machine sputtered in 2006, reporting its first-ever quarter of lower revenue and sales. With thousands of spec homes sitting vacant, Horton turned up the heat, offering significant discounts and incentives to close deals.
At the same time, the builder made good on its reputation of frugality, scrutinizing everything from its land deals and trade partner contracts to items in the snack machines to cut $200 million in costs. The effort paid off. For the second consecutive year, D.R. Horton was the only builder that sold and closed more than 50,000 homes in a fiscal year.
The celebration was short-lived. First-quarter profits for fiscal year 2007 plunged 64.6 percent from the previous quarter as the builder worked to reduce its unsold inventory—and CEO Don Tomnitz hit the road to motivate the sales staff. “I always raise someone's hand, feel their pulse and feel their forehead,” Tomnitz said in a presentation at the Citigroup Global Industrial Manufacturing Conference in March 2007. “I tell our salespeople, ‘If they have got a pulse and they are warm, write them. Take them out of the marketplace, because if you don't, one of our competitors will.'” - Pat Curry
BAD NEWS BUILDERS: Since the BUILDER 100 closed 3,948 fewer homes in 2006 than 2005, it should come as no surprise that a number of the country's top 100 builders saw their closings decline this year. So how many saw their closings fall? Forty-eight members of the BUILDER 100, while 35 saw their revenues fall off this year. Above are the companies on the BUILDER 100 that fell off the most. Those falling to the Next 100 were not included.