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Beazer Homes Reports Fourth Quarter and Full Year Fiscal 2012 Results



  Beazer Homes Reports Fourth Quarter and Full Year Fiscal 2012 Results

Business Wire

ATLANTA -- November 12, 2012

Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its
financial results for the quarter and fiscal year ended September 30, 2012.

“I'm pleased with the significant progress we made in 2012 strengthening both
our business and our balance sheet,” said Allan Merrill, President and Chief
Executive Officer of Beazer Homes. “Operationally, we generated significant
growth in orders, closings and backlog, while seeing improving trends in gross
margins. From a balance sheet perspective, we added liquidity, improved our
book value, extended debt maturities and reduced interest expense."

"In 2013, we expect to meaningfully improve our EBITDA, primarily by achieving
margin expansion and further improvement in our sales per community metrics.
While our community count will likely decrease for much of the year, we are
actively investing in a substantial number of new communities, which we expect
to deliver closings starting in fiscal year 2014.”

Summary results of the fiscal year and quarter are as follows (all per share
amounts are calculated after giving effect to a 1-for-5 reverse stock split
completed subsequent to September 30, 2012):

Full Year Results from Continuing Operations (unless otherwise specified)

                                        Year Ended September 30,
                                        2012         2011         Change
New Home Orders                         4,901        3,927        24.8    %
Average community count                 178          179          (0.6    )%
Orders per month per community          2.3          1.8          27.8    %
Cancellation rates                      27.2     %   27.0     %   20       bps
                                                                           
Total Home Closings                     4,428        3,249        36.3    %
Average sales price from closings (in   $ 224.9      $ 219.4      2.5     %
thousands)
Homebuilding revenue (in millions)      $ 996.1      $ 712.7      39.8    %
Homebuilding gross profit margin,
excluding impairments and
abandonments                            11.6     %   10.7     %   90      bps
Homebuilding gross profit margin,
excluding impairments,
abandonments and interest amortized     17.7     %   17.2     %   50      bps
to cost of sales
                                                                           
Net loss from continuing operations     $ (135.6 )   $ (200.2 )   $ 64.6
(in millions)
Per Share                               $ (7.34  )   $ (13.53 )   $ 6.19
Loss on debt extinguishment (in         $ (45.1  )   $ (2.9   )   $ (42.2 )
millions)
Inventory impairments (in millions)     $ (12.2  )   $ (32.5  )   $ 20.3
Net (loss) income from continuing
operations excluding loss on debt
extinguishment and inventory            $ (78.3  )   $ (164.8 )   $ 86.5
impairments (in millions)
Land and land development spending      $ 185.5      $ 221.6      $ (36.1 )
(in millions)
Adjusted EBITDA (in millions)           $ 21.8       $ (24.9  )   $ 46.7
                                                                           
                                                                           

Q4 Results from Continuing Operations (unless otherwise specified)

                                          Quarter Ended September 30,
                                          2012        2011        Change
New Home Orders                           1,110       1,006       10.3    %
Average community count                   163         184         (11.4   )%
Orders per month per community            2.3         1.8         27.8    %
Cancellation rates                        31.1    %   34.2    %   -310     bps
                                                                           
Total Home Closings                       1,608       1,376       16.9    %
Average sales price from closings (in     $ 228.6     $ 228.1     0.2     %
thousands)
Homebuilding revenue (in millions)        $ 367.5     $ 313.8     17.1    %
Homebuilding gross profit margin,
excluding impairments and
abandonments                              11.8    %   9.9     %   190     bps
Homebuilding gross profit margin,
excluding impairments,
abandonments and interest amortized to    17.2    %   16.3    %   90      bps
cost of sales
                                                                           
Net loss from continuing operations (in   $ (60.4 )   $ (42.4 )   $ (18.0 )
millions)
Per Share                                 $ (2.57 )   $ (2.86 )   $ 0.29
Loss on debt extinguishment (in           $ (42.4 )   $ —         $ (42.4 )
millions)
Inventory impairments (in millions)       $ (1.7  )   $ (7.1  )   $ 5.4
Net (loss) income from continuing
operations excluding loss on debt
extinguishment and inventory              $ (16.3 )   $ (35.3 )   $ 19.0
impairments (in millions)
Land and land development spending (in    $ 45.0      $ 43.6      $ 1.4
millions)
Adjusted EBITDA (in millions)             $ 15.1      $ 8.9       $ 6.2
                                                                           
                                                                           

As of September 30, 2012

  * Total cash and cash equivalents: $741.1 million, including unrestricted
    cash of approximately $487.8 million
  * Stockholders' equity: $262.2 million, not including $9.4 million of
    mandatory convertible subordinated notes, which automatically convert to
    common stock at maturity in 2013
  * Total backlog from continuing operations: 1,923 homes with a sales value
    of $479.1 million, compared to 1,450 homes with a sales value of $334.5
    million as of September 30, 2011
  * Land and lots controlled: 24,147 lots (82.6% owned), a decrease of 9.5%
    from September 30, 2011

Capital Markets Activity

During the quarter ended September 30, 2012, we engaged in several capital
raising transactions designed to further strengthen our balance sheet and
position us to better participate in the emerging housing recovery. During
July, we completed underwritten public offerings of 4.4 million
(split-adjusted) shares of Beazer common stock at $14.50 per share, totaling
$63.8 million, 4.6 million 7.50% tangible equity units, totaling $115.0
million, and a private placement of $300 million of 6.625% senior secured
notes due 2018, generating approximately $466 million of proceeds, net of the
offering fees and expenses. A portion of these proceeds were used to fund the
redemption of our $250 million 12% senior secured notes due 2017 and to
repurchase $15 million of our 9 1/8% senior unsecured notes due 2019. The
remaining funds will be used to expand our new home community count in
targeted markets and for general corporate purposes. The capital market
transactions completed in fiscal 2012 are expected to reduce the Company's
annual interest expense obligation by approximately $15 million.

Also, while we believe we possess sufficient liquidity to participate in a
housing recovery, we are mindful of potential short-term, or seasonal,
requirements for enhanced liquidity that may arise. Therefore, during
September, we entered into a $150 million, three-year amended and restated
senior revolving credit facility, further strengthening our available
liquidity.

Finally, subsequent to September 30, 2012, we announced the effectiveness of a
1-for-5 reverse split of our common stock. Shares of Beazer Homes' common
stock began trading on a split-adjusted basis on October 12, 2012.

Conference Call

The Company will hold a conference call on November 12, 2012 at 11:00 am ET to
discuss these results. Interested parties may listen to the conference call
and view the Company's slide presentation over the Internet by visiting the
“Investor Relations” section of the Company's website at www.beazer.com. To
access the conference call by telephone, listeners should dial 800-619-8639
(for international callers, dial 312-470-7002). To be admitted to the call,
verbally supply the passcode "BZH". A replay of the call will be available
shortly after the conclusion of the live call. To directly access the replay,
dial 866-495-9351 or 203-369-1779 and enter the passcode “3740” (available
until 11:00 pm ET on November 19, 2012 ), or visit www.beazer.com. A replay of
the webcast will be available at www.beazer.com for approximately 30 days.

Beazer Homes USA Inc., headquartered in Atlanta, Georgia, is one of the ten
largest single-family homebuilders in the United States. The Company's
industry-leading high performance homes are designed to lower the total cost
of home ownership while reducing energy and water consumption. With
award-winning floor-plans, the Company offers homes that incorporate
exceptional value and quality to consumers in 16 states, including Arizona,
California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey,
New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and
Virginia. Beazer Homes is listed on the New York Stock Exchange and trades
under the ticker symbol “BZH.”

For more information, please visit Beazer.com or check out Beazer on Facebook
and Twitter.

Forward Looking Statements

This press release contains forward-looking statements. These forward-looking
statements represent our expectations or beliefs concerning future events, and
it is possible that the results described in this press release will not be
achieved. These forward-looking statements are subject to risks, uncertainties
and other factors, many of which are outside of our control, that could cause
actual results to differ materially from the results discussed in the
forward-looking statements, including, among other things, (i) economic
changes nationally or in local markets, including changes in consumer
confidence, declines in employment levels, inflation and increases in the
quantity and decrease in the price of new homes and resale homes in the
market; (ii) a slower economic rebound than anticipated, coupled with
persistently high unemployment and additional foreclosures; (iii) estimates
related to homes to be delivered in the future (backlog) are imprecise as they
are subject to various cancellation risks which cannot be fully controlled;
(iv) a substantial increase in mortgage interest rates, increased disruption
in the availability of mortgage financing or a change in tax laws regarding
the deductibility of mortgage interest; (v) factors affecting margins such as
decreased land values underlying lot option agreements, increased land
development costs on communities under development or delays or difficulties
in implementing initiatives to reduce production and overhead cost structure;
(vi) the final outcome of various putative class action lawsuits, multi-party
suits and similar proceedings as well as the results of any other litigation
or government proceedings and fulfillment of the obligations in the Deferred
Prosecution Agreement and consent orders with governmental authorities and
other settlement agreements; (vii) our cost of and ability to access capital
and otherwise meet our ongoing liquidity needs including the impact of any
downgrades of our credit ratings or reductions in our tangible net worth or
liquidity levels; (viii) our ability to comply with covenants in our debt
agreements or satisfy such obligations through repayment or refinancing; (ix)
estimates related to the potential recoverability of our deferred tax assets;
(x) increased competition or delays in reacting to changing consumer
preference in home design; (xi) shortages of or increased prices for labor,
land or raw materials used in housing production; (xii) additional asset
impairment charges or writedowns; (xiii) the impact of construction defect and
home warranty claims; (xiv) the cost and availability of insurance and surety
bonds; (xv) delays in land development or home construction resulting from
adverse weather conditions; (xvi) potential delays or increased costs in
obtaining necessary permits and possible penalties for failure to comply with
laws, regulations and governmental policies; (xvii) the performance of our
joint ventures and our joint venture partners; (xviii) potential exposure
related to additional repurchase claims on mortgages and loans originated by
Beazer Mortgage Corp.; (xix) effects of changes in accounting policies,
standards, guidelines or principles; or (xx) terrorist acts, acts of war and
other factors over which the Company has little or no control.

Any forward-looking statement speaks only as of the date on which such
statement is made, and, except as required by law, we do not undertake any
obligation to update or revise any forward-looking statement, whether as a
result of new information, future events or otherwise. New factors emerge from
time to time and it is not possible for management to predict all such
factors.

                               -Tables Follow-

BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
                                               
                Three Months Ended              Fiscal Year Ended
                September 30,                   September 30,
                2012            2011            2012              2011
Total revenue   $ 370,931       $ 334,908       $ 1,005,677       $ 742,405
Home
construction    327,815         303,438         888,379           661,851
and land sales
expenses
Inventory
impairments and 1,718           7,128           12,210            32,459      
option contract
abandonments
Gross profit    41,398          24,342          105,088           48,095
Commissions     16,063          14,645          43,585            32,711
General and
administrative  27,671          30,234          110,051           137,376
expenses
Depreciation
and             4,174           3,626           13,510            10,253      
amortization
Operating loss  (6,510    )     (24,163   )     (62,058     )     (132,245   )
Equity in
income (loss)
of              329             188             304               560
unconsolidated
entities
Loss on
extinguishment  (42,350   )     —               (45,097     )     (2,909     )
of debt
Other expense,  (15,777   )     (15,608   )     (69,119     )     (62,224    )
net
Loss from
continuing
operations      (64,308   )     (39,583   )     (175,970    )     (196,818   )
before income
taxes
(Benefit from)
provision for   (3,909    )     2,796           (40,347     )     3,366       
income taxes
Loss from
continuing      (60,399   )     (42,379   )     (135,623    )     (200,184   )
operations
Loss from
discontinued    (5,834    )     (797      )     (9,703      )     (4,675     )
operations, net
of tax
Net loss        $ (66,233 )     $ (43,176 )     $ (145,326  )     $ (204,859 )
Weighted
average number
of shares:
Basic and       23,528          14,830          18,474            14,797
Diluted
Basic and
diluted loss
per share:
Continuing      $ (2.57   )     $ (2.86   )     $ (7.34     )     $ (13.53   )
Operations
Discontinued    $ (0.25   )     $ (0.05   )     $ (0.53     )     $ (0.31    )
operations
Total           $ (2.82   )     $ (2.91   )     $ (7.87     )     $ (13.84   )
                                                                              
                                                                              

                       Three Months Ended            Fiscal Year Ended
                       September 30,                 September 30,
                       2012           2011           2012           2011
Capitalized interest
in inventory,          $ 45,373       $ 51,230       $ 45,973       $ 36,884
beginning of period
Interest incurred      28,968         32,643         124,918        130,818
Capitalized interest   —              (118     )     (275     )     (1,907   )
impaired
Interest expense not
qualified for
capitalization and     (16,327  )     (17,752  )     (71,474  )     (73,440  )
included as other
expense
Capitalized interest
amortized to house     (19,824  )     (20,030  )     (60,952  )     (46,382  )
construction and land
sales expenses
Capitalized interest
in inventory, end of   $ 38,190       $ 45,973       $ 38,190       $ 45,973  
period
                                                                              
                                                                              

BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
                                                           
                                     September 30, 2012     September 30, 2011
ASSETS
Cash and cash equivalents            $   487,795            $   370,403
Restricted cash                      253,260                277,058
Accounts receivable (net of
allowance of $2,235 and $3,872,      24,599                 28,303
respectively)
Income tax receivable                6,372                  4,823
Inventory
Owned inventory                      1,099,132              1,192,380
Land not owned under option          12,420                 11,753           
agreements
Total inventory                      1,111,552              1,204,133
Investments in unconsolidated        42,078                 9,467
entities
Deferred tax assets, net             6,848                  2,760
Property, plant and equipment, net   18,974                 22,613
Previously owned rental homes, net   —                      11,347
Other assets                         30,740                 46,570           
Total assets                         $   1,982,218          $   1,977,477    
                                                             
LIABILITIES AND STOCKHOLDERS’
EQUITY
Trade accounts payable               $   69,268             $   72,695
Other liabilities                    147,718                212,187
Obligations related to land not      4,787                  5,389
owned under option agreements
Total debt (net of discounts of      1,498,198              1,488,826        
$3,082 and $23,243, respectively)
Total liabilities                    $   1,719,971          $   1,779,097    
                                                             
Stockholders’ equity:
Preferred stock (par value $.01
per share, 5,000,000 shares          $   —                  $   —
authorized, no shares issued)
Common stock (par value $0.001 per
share, 100,000,000 shares
authorized, 24,601,830 and
15,117,679 issued and outstanding,   25                     15
respectively)
Paid-in capital                      833,994                624,811
Accumulated deficit                  (571,772        )      (426,446        )
Total stockholders’ equity           262,247                198,380          
Total liabilities and                $   1,982,218          $   1,977,477    
stockholders’ equity
                                                             
Inventory Breakdown
Homes under construction             $   251,828            $   277,331
Development projects in progress     391,019                424,055
Land held for future development     367,102                384,761
Land held for sale                   10,149                 12,837
Capitalized interest                 38,190                 45,973
Model homes                          40,844                 47,423
Land not owned under option          12,420                 11,753           
agreements
Total inventory                      $   1,111,552          $   1,204,133    
                                                                             
                                                                             

BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
                                                    
                     Quarter Ended                   Fiscal Year Ended
                     September 30,                   September 30,
SELECTED OPERATING   2012            2011            2012            2011
DATA
Closings:
West region          689             445             1,883           1,115
East region          522             584             1,506           1,316
Southeast region     397             347             1,039           818
Continuing           1,608           1,376           4,428           3,249
Operations
Discontinued         —               28              19              101
Operations
Total closings       1,608           1,404           4,447           3,350
                                                                      
New orders, net of
cancellations:
West region          464             378             2,152           1,416
East region          378             385             1,615           1,588
Southeast region     268             243             1,134           923
Continuing           1,110           1,006           4,901           3,927
Operations
Discontinued         —               17              2               94
Operations
Total new orders     1,110           1,023           4,903           4,021
                                                                      
Backlog units at
end of period:
West region          839             570             839             570
East region          747             638             747             638
Southeast region     337             242             337             242
Continuing           1,923           1,450           1,923           1,450
Operations
Discontinued         —               17              —               17
Operations
Total backlog        1,923           1,467           1,923           1,467
units
                                                                      
Dollar value of
backlog at end of    $ 479.1         $ 338.3         $ 479.1         $ 338.3
period (in
millions)
                                                                      
Homebuilding
Revenue (in
thousands):
West region          $ 141,124       $ 89,548        $ 386,544       $ 218,433
East region          146,295         157,299         401,814         339,666
Southeast region     80,100          66,988          207,701         154,623
Total homebuilding   $ 367,519       $ 313,835       $ 996,059       $ 712,722
revenue
                                                                        
                                                                        

BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
(Dollars in thousands)
                                               
                Quarter Ended September 30,     Fiscal Year Ended September
                                                30,
SUPPLEMENTAL
FINANCIAL       2012            2011            2012                 2011
DATA
Revenues:
Homebuilding    $ 367,519       $ 313,835       $  996,059           $ 712,722
Land sales      3,412           21,073          9,618                29,683
and other
Total           $ 370,931       $ 334,908       $  1,005,677         $ 742,405
                                                                      
Gross profit:
Homebuilding    $ 41,630        $ 23,869        $  103,105           $ 43,996
Land sales      (232      )     473             1,983                4,099
and other
Total           $ 41,398        $ 24,342        $  105,088           $ 48,095
                                                                        

Reconciliation of homebuilding gross profit before impairments and
abandonments and interest amortized to cost of sales and the related gross
margins to homebuilding gross profit and gross margin, the most directly
comparable GAAP measure, is provided for each period discussed below:

             Quarter Ended September 30,                     Fiscal Year Ended September 30,
             2012                    2011                    2012                     2011
Homebuilding $ 41,630     11.3 %     $ 23,869     7.6  %     $ 103,105     10.4 %     $ 43,996      6.2  %
gross profit
Inventory
impairments
and lot
option
abandonments 1,718                   7,128                   12,210                   32,459     
(I&A)
Homebuilding
gross profit 43,348       11.8 %     30,997       9.9  %     115,315       11.6 %     76,455        10.7 %
before I&A
Interest
amortized to 19,824                  20,030                  60,952                   46,382     
cost of
sales
Homebuilding
gross profit
before I&A
and
interest
amortized to $ 63,172     17.2 %     $ 51,027     16.3 %     $ 176,267     17.7 %     $ 122,837     17.2 %
cost of
sales
                                                                                                          

Reconciliation of Adjusted EBITDA (earnings before interest, taxes,
depreciation, amortization, loss on debt extinguishment and impairments) to
net income (loss), the most directly comparable GAAP measure, is provided for
each period discussed below. Management believes that Adjusted EBITDA assists
investors in understanding and comparing the operating characteristics of
homebuilding activities by eliminating many of the differences in companies'
respective capitalization, tax position and level of impairments.

                 Quarter Ended September 30,     Fiscal Year Ended September
                                                 30,
                 2012            2011            2012             2011
Net loss         $ (66,233 )     $ (43,176 )     $ (145,326 )     $ (204,859 )
(Benefit)
provision from   (3,901    )     2,850           (40,747    )     3,429
Income Taxes
Interest
amortized to
home
construction
and land sales
expenses,
capitalized
interest
impaired, and
interest
expense not
qualified
for              36,151          37,900          132,701          121,729
capitalization
Depreciation
and
amortization     4,991           4,246           17,573           17,878
and stock
compensation
amortization
Inventory
impairments
and option       1,718           7,102           12,514           33,458
contract
abandonments
Loss on debt     42,350          —               45,097           2,909
extinguishment
Joint venture
impairment and   —               7               36               594         
abandonment
charges
Adjusted         $ 15,076        $ 8,929         $ 21,848         $ (24,862  )
EBITDA
                                                                              

Contact:

Beazer Homes USA, Inc.
Carey Phelps, 770-829-3700
Director, Investor Relations & Corporate Communications
investor.relations@beazer.com
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