for-20200723
0001406587FALSE00014065872020-07-232020-07-23


UNITED STATES 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 (Date of earliest event reported): July 23, 2020
 ______________________________
Forestar Group Inc.
(Exact name of registrant as specified in its charter)

Delaware001-3366226-1336998
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
2221 E. Lamar Blvd., Suite 790, Arlington, Texas 76006
(Address of principal executive offices)
(817769-1860
(Registrant’s telephone number, including area code)
 ______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value :schemaRef xlink:type="simple" xlink:href="for-20200723.xsd">00014065872020-07-232020-07-23


UNITED STATES 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 (Date of earliest event reported): July 23, 2020
 ______________________________
Forestar Group Inc.
(Exact name of registrant as specified in its charter)

Delaware001-3366226-1336998
(State or other jurisdiction of incorporation)
(Commission File Number)
(IRS Employer Identification No.)
2221 E. Lamar Blvd., Suite 790, Arlington, Texas 76006
(Address of principal executive offices)
(817769-1860
(Registrant’s telephone number, including area code)
 ______________________________

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions (see General Instruction A.2. below):
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:
Title of Each ClassTrading SymbolName of Each Exchange on Which Registered
Common Stock, par value $1.00 per shareFORNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 2.02. Results of Operations and Financial Condition.

On July 23, 2020, Forestar Group Inc. issued a press release announcing its results and related information for its third quarter ended June 30, 2020. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference in its entirety into this Item 2.02.

The information furnished in this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d)Exhibits
99.1*
FORNew York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (17 CFR 230.405) or Rule 12b-2 of the Securities Exchange Act of 1934 (17 CFR 240.12b-2).
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o





Item 2.02. Results of Operations and Financial Condition.

On July 23, 2020, Forestar Group Inc. issued a press release announcing its results and related information for its third quarter ended June 30, 2020. A copy of the press release is attached hereto as Exhibit 99.1 and is incorporated by reference in its entirety into this Item 2.02.

The information furnished in this Item 2.02 shall not be deemed “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, or otherwise subject to the liabilities of that section, nor shall such information be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in such filing.

Item 9.01. Financial Statements and Exhibits.

(d)Exhibits
99.1*
104**Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101).
*Filed or furnished herewith.
**Submitted electronically herewith.





SIGNATURE

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 hereunto duly authorized.

Forestar Group Inc.
Date:July 23, 2020By:
/S/ JAMES D. ALLEN
James D. Allen
Executive Vice President and
Chief Financial Officer




Document

Exhibit 99.1

FORESTAR REPORTS FISCAL 2020 THIRD QUARTER EARNINGS OF $0.21 PER DILUTED SHARE
ARLINGTON, Texas (Business Wire) - July 23, 2020
Forestar Group Inc. ("Forestar") (NYSE: FOR), a leading national residential lot developer, today reported financial results for its third quarter ended June 30, 2020. Net income attributable to Forestar for the third quarter of fiscal 2020 increased 46% to $10.1 million, or $0.21 per diluted share, compared to $6.9 million, or $0.16 per diluted share, in the same quarter of fiscal 2019. The current quarter results include an income tax benefit of $2.3 million related to the net operating loss carryback provisions of the recently enacted CARES Act.
Revenues for the third quarter of fiscal 2020 increased 102% to $177.9 million from $88.2 million in the same quarter of fiscal 2019. Residential lots sold in the quarter increased 75% to 2,023 lots compared to 1,158 lots in the same quarter of fiscal 2019.
Net income attributable to Forestar for the nine months ended June 30, 2020 increased 80% to $36.5 million, or $0.76 per diluted share, compared to $20.3 million, or $0.48 per diluted share, in the same period of fiscal 2019.
Revenues for the nine months ended June 30, 2020 increased 204% to $584.3 million from $192.0 million in the same period of fiscal 2019. Residential lots sold in the first nine months of fiscal 2020 increased 188% to 6,396 lots compared to 2,224 lots sold in the same period of fiscal 2019.
The Company's lot position at June 30, 2020 consisted of 50,700 lots, of which 38,300 were owned and 12,400 were controlled through purchase contracts. Of the Company's owned lot position, 29,600 lots, or 77%, were under contract to sell or subject to a right of first offer to D.R. Horton, Inc. ("D.R. Horton") at June 30, 2020.
The Company ended the third quarter with $355.6 million of unrestricted cash and $348.4 million of available borrowing capacity on its senior unsecured revolving credit facility for total liquidity of $704.0 million. Debt at June 30, 2020 totaled $640.6 million, with no senior note maturities until fiscal 2024, and the Company's net debt to total capital ratio was 25.2%. 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 remains uniquely positioned to consolidate market share in the under-served lot development market that lacks well-capitalized and national participants. As housing market conditions improved in May and June, Forestar was able to quickly respond to the increased demand for residential lots and deliver solid third quarter results.
"We appreciate the continued efforts of our dedicated teams across the country who are focused on developing finished lots for homes at affordable price points during the COVID-19 pandemic. Our priority continues to be the health and safety of our people and the communities we serve. Forestar is well positioned to effectively operate during changing economic conditions due to our low net leverage and strong liquidity position, our low overhead model and our strategic relationship with D.R. Horton, the nation’s largest homebuilder."

COVID-19
During the latter part of March 2020, the impacts of the COVID-19 pandemic (C-19) and the related widespread reductions in economic activity began to temporarily affect the Company’s business operations and the demand for its residential lots. However, residential construction is designated an essential business as part of critical infrastructure in almost all municipalities across the U.S. where Forestar operates. The Company implemented operational protocols to comply with social distancing and other health and safety standards as required by federal, state and local government agencies, taking into consideration guidelines of the Centers for Disease Control and Prevention and other public health authorities.

The Company's lot sales pace declined in late March and April as homebuilders slowed their purchases of lots to adjust to lower expected levels of home sales orders as a result of the pandemic. However, as housing market conditions began to improve during May and June, the Company's lot sales pace increased.





Even with the improvement in demand in May and June, the Company remains cautious as to the impact C-19 may have on its operations and on the overall economy in the future. There is significant uncertainty regarding the extent to which and how long C-19 and its related effects will have on the U.S. economy, capital markets and demand for the Company's lots. The extent to which C-19 impacts Forestar's operational and financial performance will depend on future developments, including the duration and spread of C-19 and the impact on the Company's customers, trade partners and employees, all of which are highly uncertain and cannot be predicted.

Conference Call and Webcast Details
The Company will host a conference call today (Thursday, July 23) at 5:00 p.m. Eastern Time. The dial-in number is 877-407-9205, and the call will also be webcast from the Company’s website at investor.forestar.com.

About Forestar Group Inc.
Forestar Group Inc. is a residential lot development company with operations in 51 markets and 22 states at June 30, 2020 and is a majority-owned subsidiary of D.R. Horton, the largest homebuilder by volume in the United States since 2002.

Forward-Looking Statements
Portions of this document may constitute “forward-looking statements” as defined by the Private Securities Litigation Reform Act of 1995. Although Forestar believes any such statements are based on reasonable assumptions, there is no assurance that actual outcomes will not be materially different. All forward-looking statements are based upon information available to Forestar on the date this release was issued. Forestar does not undertake any obligation to publicly update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward-looking statements in this release include that Forestar remains uniquely positioned to consolidate market share in the under-served lot development market that lacks well-capitalized and national participants and that Forestar is well positioned to effectively operate during changing economic conditions due to our low net leverage and strong liquidity position, our low overhead model and our strategic relationship with D.R. Horton, the nation’s largest homebuilder. The forward-looking statements also include all commentary in the C-19 section.
Factors that may cause the actual results to be materially different from the future results expressed by the forward-looking statements include, but are not limited to: the impact of C-19 on the economy and our business; the effect of D.R. Horton's controlling level of ownership on us and the holders of our securities; our ability to realize the potential benefits of the strategic relationship with D.R. Horton; the effect of our strategic relationship with D.R. Horton on our ability to maintain relationships with our vendors and customers; demand for new housing, which can be affected by a number of factors including the availability of mortgage credit, job growth and fluctuations in interest rates; competitive actions by other companies; accuracy of estimates and other assumptions related to investment in and development of real estate, the expected timing and pricing of land and lot sales and related cost of real estate sales; our ability to comply with our debt covenants, restrictions and limitations; our ability to hire and retain key personnel; changes in governmental policies, laws or regulations and actions or restrictions of regulatory agencies; general economic, market or business conditions where our real estate activities are concentrated; our ability to achieve our strategic initiatives; our ability to obtain future entitlement and development approvals; our ability to obtain or the availability of surety bonds to secure our performance related to construction and development activities and the pricing of bonds; obtaining reimbursements and other payments from governmental districts and other agencies and timing of such payments; the levels of resale housing inventory in our projects and the regions in which they are located; fluctuations in costs and expenses, including impacts from shortages in materials or labor; the opportunities (or lack thereof) that may be presented to us and that we may pursue; the strength of our information technology systems and the risk of cybersecurity breaches; and the conditions of the capital markets and our ability to raise capital to fund expected growth. Additional information about issues that could lead to material changes in performance is contained in Forestar's annual report on Form 10-K and subsequent quarterly reports on Form 10-Q, all of which are or will be filed with the Securities and Exchange Commission.

Contact
Investor Relations:
Jessica Hansen, 817-390-8195
InvestorRelations@forestar.com



FORESTAR GROUP INC.
Consolidated Balance Sheets
(Unaudited)
June 30,
2020
September 30,
2019
 (In millions, except share data)
ASSETS
Cash and cash equivalents$355.6  $382.8  
Real estate1,287.1  1,028.9  
Investment in unconsolidated ventures5.5  7.3  
Income taxes receivable8.9  3.2  
Property and equipment, net1.2  2.4  
Deferred tax asset, net—  17.4  
Other assets27.1  13.7  
Total assets$1,685.4  $1,455.7  
LIABILITIES
Accounts payable$26.0  $16.8  
Earnest money on sales contracts98.9  89.9  
Accrued expenses and other liabilities73.0  79.6  
Debt640.6  460.5  
Total liabilities838.5  646.8  
EQUITY
Common stock, par value $1.00 per share, 200,000,000 authorized shares,
   48,059,921 and 47,997,366 shares issued and outstanding at June 30, 2020 and September 30, 2019, respectively
48.1  48.0  
Additional paid-in capital603.5  602.2  
Retained earnings194.7  158.1  
Stockholders' equity846.3  808.3  
Noncontrolling interests0.6  0.6  
Total equity846.9  808.9  
Total liabilities and equity$1,685.4  $1,455.7  





FORESTAR GROUP INC.
Consolidated Statements of Operations
(Unaudited)

 Three Months Ended
June 30,
Nine Months Ended
June 30,
 2020201920202019
 (In millions, except per share amounts)
Revenues$177.9  $88.2  $584.3  $192.0  
Cost of sales157.1  75.3  510.3  149.6  
Selling, general and administrative expense11.2  7.9  32.8  19.8  
Equity in loss (earnings) of unconsolidated ventures0.1  —  (0.6) (0.5) 
Gain on sale of assets—  (1.5) (0.1) (2.4) 
Interest and other income(0.8) (1.9) (4.2) (4.1) 
Income before income taxes10.3  8.4  46.1  29.6  
Income tax expense0.2  1.5  8.9  6.0  
Net income10.1  6.9  37.2  23.6  
Net income attributable to noncontrolling interests—  —  0.7  3.3  
Net income attributable to Forestar Group Inc.
$10.1  $6.9  $36.5  $20.3  
Basic net income per common share attributable to Forestar Group Inc.$0.21  $0.16  $0.76  $0.48  
Weighted average number of common shares48.1  42.0  48.0  42.0  
Diluted net income per common share attributable to Forestar Group Inc.$0.21  $0.16  $0.76  $0.48  
Adjusted weighted average number of common shares48.1  42.0  48.1  42.0  




FORESTAR GROUP INC.
Revenues, Residential Lots Sold and Lot Position
(Unaudited)

REVENUES
 Three Months Ended June 30,Nine Months Ended June 30,
 2020201920202019
 (In millions)
Residential lot sales:
Development projects
$124.5  $59.0  $340.8  $129.7  
Lot banking projects
37.1  30.6  195.0  45.5  
Decrease (increase) in contract liabilities
2.8  (2.0) 2.1  (3.6) 
164.4  87.6  537.9  171.6  
Residential tract sales13.4  —  43.5  —  
Commercial tract sales—  —  2.5  18.5  
Other0.1  0.6  0.4  1.9  
$177.9  $88.2  $584.3  $192.0  

RESIDENTIAL LOTS SOLD
Three Months Ended June 30,Nine Months Ended June 30,
2020201920202019
Development projects1,556  723  4,234  1,597  
Lot banking projects467  435  2,162  627  
2,023  1,158  6,396  2,224  
Average sales price per lot (1)
$79,900  $77,400  $83,800  $78,800  
LOT POSITION
June 30,
2020
September 30,
2019
Lots owned38,300  
(2)
29,700  
(3)
Lots controlled under land and lot purchase contracts12,400  8,600  
Total lots owned and controlled50,700  38,300  
_____________
(1)Excludes any impact from change in contract liabilities.
(2)Lots owned at June 30, 2020 include approximately 14,100 under contract to sell to D.R. Horton and 15,500 of which D.R. Horton has a right of first offer to purchase.
(3)Lots owned at September 30, 2019 include approximately 12,800 under contract to sell to D.R. Horton and 10,600 of which D.R. Horton has a right of first offer to purchase.


v3.20.2
Cover
Jul. 23, 2020
Entity Information [Line Items]  
Document Type 8-K
Document Period End Date Jul. 23, 2020
Entity Registrant Name Forestar Group Inc.
Entity Incorporation, State or Country Code DE
Entity File Number 001-33662
Entity Tax Identification Number 26-1336998
Entity Address, Address Line One 2221 E. Lamar Blvd.
Entity Address, Address Line Two Suite 790
Entity Address, City or Town Arlington
Entity Address, State or Province TX
Entity Address, Postal Zip Code 76006
City Area Code 817
Local Phone Number 769-1860
Written Communications false
Soliciting Material false
Pre-commencement Tender Offer false
Pre-commencement Issuer Tender Offer false
Title of 12(b) Security Common Stock, par value $1.00 per share
Trading Symbol FOR
Security Exchange Name NYSE
Entity Emerging Growth Company false
Entity Central Index Key 0001406587
Amendment Flag false