The following is a summary of the Forestar Group Inc. (FOR) Q2 2024 Earnings Call Transcript:

Financial Performance:

• Forestar's Q2 net income increased by 67% to $45 million, or $0.89 per share.

• Pre-tax income increased by 64% to $58.9 million.

• Consolidated revenues increased by 11% to $333.8 million.

• Lots sold increased by 10% to 3,289, contributing to a 14.9% return on equity for the trailing 12 months.

• Gross profit margin for the quarter was 24.9%, positively impacted by non-recurring revenue items.

• SG&A expense increased by 33% to $29.2 million, primarily due to a 25% increase in the number of employees.

• Total debt at the end of March was $706 million, with a net debt-to-capital ratio of 16.4%.

Business Progress:

• Despite constrained market supply, Forestar is meeting strong demand for developed lots.

• With D.R. Horton emerging as a key customer, the company predicts clear growth paths.

• The company's strategy includes expanding within Horton and growing its overall footprint, with significant growth required by Forestar.

• Forestar aims to sell around 30% of its lots to other customers and is in talks to position complementary builders for larger communities.

• Significant increase in lot control through the option lot bucket suggests double-digit volume growth in the future.

• The company expects lot delivery times to be 12 to 15 months for the first phase, indicating growth plans for 2025 and beyond.

• Forestar intends to expand their team to support project executions and to secure successful growth plan execution.

• The company plans to invest around $1.5 to $1.6 billion this year with a third allocated to land acquisition for future growth.

More details: Forestar Group IR

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