KB Home reported results for its fourth quarter and fiscal year ended November 30, 2014. Total revenues of $796 million increased 29% from $618.5 million in the fourth quarter of 2013.
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This was driven by growth in the company's housing revenues as a result of a greater volume of homes delivered and higher average selling prices. The company's revenues have
now increased on a year-over-year basis for 13 consecutive quarters.
The company delivered 2,229 homes in the fourth quarter, an increase of 9% from 2,038 homes delivered in the year-earlier quarter. More homes were delivered in each of the company's homebuilding regions compared to the fourth quarter of 2013.
The overall average selling price of homes delivered rose 17% to $351,500, up from $301,100 for the same period of 2013, marking the company's 18th straight quarter of year-over-year growth.
Homebuilding operating income totaled $30.0 million, compared to $47.0 million in the year-earlier quarter. The current quarter included $34.2 million of inventory impairment charges, of which $23.2 million related to the planned future land sale of a non-strategic asset. The 2013 fourth quarter included $8.5 million of warranty-related charges and $3.3 million of inventory impairment and land option contract abandonment charges.
The housing gross profit margin declined 60 basis points to 17.3% from 17.9% in the year-earlier quarter. Excluding the housing inventory- and warranty-related charges, the company's fourth quarter adjusted housing gross profit margin was 18.7% in 2014 and 19.8% in 2013. The decrease occurred primarily within inland markets of the company's West Coast homebuilding region.
Selling, general and administrative expenses as a percentage of housing revenues increased to 10.5% from 10.3% in the year-earlier quarter. In the 2013 fourth quarter, these expenses were partially offset by the reversal of an $8.2 million accrual following a favorable court decision.
Excluding the impact of this reversal, the company's selling, general and administrative expense ratio was 11.6% in the 2013 fourth quarter.
Twelve months ended November 30, 2014:
Revenues of $2.40 billion were up 14% from $2.10 billion in the year-earlier period. The company delivered 7,215 homes, up from 7,145 homes delivered in 2013. The overall average selling price of $328,400 increased 13% from $291,700 in the prior year.
Homebuilding operating income rose to $116.0 million, up $23.9 million from $92.1 million in 2013. The company's pretax income increased to $94.9 million, up $56.5 million from $38.4 million in 2013.
Net income of $918.3 million, or $9.25 per diluted share, increased significantly from $40.0 million, or $.46 per diluted share, in 2013 largely due to the current year tax benefit associated with the company's deferred tax asset valuation allowance reversal. ■