Forestar Group Inc. ("Forestar") (NYSE: FOR) on Thursday reported net income for the fourth quarter of fiscal 2019 of $12.7 million, or $0.30 per diluted share. Wall Street was looking for a gain of $0.09 per share.
Revenues for the fourth quarter of fiscal 2019 increased 634% to $236.3 million from $32.2 million in the same quarter of fiscal 2018. Residential lots sold in the quarter increased 351% to 1,908 lots compared to 423 lots in the same quarter of fiscal 2018.
Revenues for the fiscal year ended September 30, 2019 increased 292% to $428.3 million from $109.2 million in the twelve months ended September 30, 2018. Residential lots sold in the fiscal year ended September 30, 2019 increased 223% to 4,132 lots compared to 1,279 lots sold in the twelve months ended September 30, 2018.
The company's lot position at September 30, 2019 consisted of 38,300 lots, of which 29,700 were owned and 8,600 were controlled through purchase contracts. Of the company's owned lot position, 23,400 lots, or 79%, were under contract to sell or subject to a right of first offer to D.R. Horton, Inc. at September 30, 2019.
During the fourth quarter of fiscal 2019, the company issued 6,037,500 shares of common stock for $17.50 per share in a public underwritten offering. Net proceeds from the offering after deducting underwriting discounts and commissions and other expenses were $100.7 million. As a result of the issuance, D.R. Horton, Inc.'s ownership of Forestar's outstanding common shares decreased from 75% to approximately 66%.
The company ended the year with $382.8 million of unrestricted cash and a net debt to total capital ratio of 8.8%. Net debt to total capital consists of debt net of unrestricted cash divided by stockholders’ equity plus debt net of unrestricted cash.
Donald J. Tomnitz, chairman of the board, said, "Forestar is a highly differentiated, national residential lot manufacturer. Our returns-focused business model is centered on our high turnover, lower risk lot manufacturing strategy. We are well-positioned to consolidate market share in the under-served lot development market that lacks well-capitalized and national participants. Our strategic relationship with D.R. Horton, Inc., the nation’s largest home builder, is continuing to support the rapid expansion of our operating platform and de-risks our significant growth expectations. We are executing on our plans as our fiscal 2019 results exceeded all of the guidance we issued at the beginning of the year, and we successfully raised both debt and equity in the capital markets during the year. We expect to deliver 10,000 lots during fiscal 2020 and 12,000 lots in fiscal 2021.
"We are making great progress building out our operational teams and growing our footprint as Forestar is now in 51 markets and 20 states, an increase of 27 markets and 6 states from just a year ago. With approximately 38,300 lots owned and controlled at September 30, 2019, we are well positioned for extraordinary growth in the coming years."
Effective January 1, 2018, Forestar changed its fiscal year-end from December 31 to September 30. This change aligned Forestar's fiscal year-end reporting calendar with D.R. Horton, its majority owner. The Company's results of operations and residential lots sold presented in this release are for the fiscal year ended September 30, 2019 and the twelve months ended September 30, 2018 unless otherwise noted.
