Beazer Homes Reports First Quarter Fiscal 2013 Results

  Beazer Homes Reports First Quarter Fiscal 2013 Results

Business Wire

ATLANTA -- January 28, 2013

Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its
financial results for the quarter ended December 31, 2012.

“In the first quarter we achieved improvements in nearly every operational and
financial metric compared to last year, including new orders, closings and
adjusted EBITDA,” said Allan Merrill, President and CEO of Beazer Homes.
“Additionally we saw higher home sales prices and lower cancellation rates as
most of our geographic markets continued to demonstrate signs of improvement.
We remain committed to our path-to-profitability strategies, which are
designed to enable us to return to sustained profitability as soon as
possible.”

On trends in the housing market, Mr. Merrill commented, “While there are still
challenges to overcome before the industry can achieve a full turnaround, we
believe that improvements in consumer confidence coupled with low mortgage
rates and enhanced clarity regarding mortgage qualification procedures should
provide support for both increased demand for new homes and improved new home
pricing during the balance of the year.”

Summary results for the quarter ended December 31, 2012 are as follows (all
per share amounts are calculated after giving effect to a 1-for-5 reverse
stock split completed on October 12, 2012):

Q1 Results from Continuing Operations (unless otherwise specified)

                      Quarter Ended December 31,
                       2012                 2011             Change
New Home Orders        932                    724                28.7      %
LTM orders per
month per              2.5                    1.9                31.6      %
community
Cancellation rates     26.4        %          35.1      %        -730      bps
                                                                           
Total Home             1,038                  867                19.7      %
Closings
Average sales
price from             $   235.5              $  215.5           9.3       %
closings (in
thousands)
Homebuilding
revenue (in            $   244.4              $  186.9           30.8      %
millions)
Homebuilding gross
profit margin,
excluding              14.7        %          13.3      %        140       bps
impairments and
abandonments
(I&A) (a)
Homebuilding gross
profit margin,
excluding I&A and      18.1        %          20.2      %        -210      bps
interest amortized
to cost of
sales (a)
                                                                           
Loss from
continuing
operations before      $   (19.2   )          $  (35.0  )        $  15.8
income taxes (in
millions)
Net (loss) income
from continuing        $   (18.9   )          $  0.7             $  (19.6  )
operations (in
millions)
Basic Per Share        $   (0.78   )          $  0.05            $  (0.83  )
Inventory
impairments (in        $   (0.2    )          $  (3.5   )        $  3.3
millions)
Net (loss) income
from continuing
operations
excluding              $   (18.7   )          $  4.2             $  (22.9  )
inventory
impairments (in
millions)
Land and land
development            $   90.0               $  58.2            $  31.8
spending (in
millions)
Adjusted EBITDA        $   7.7                $  3.8             $  3.9
(in millions)
                                                                           
(a) Homebuilding gross profit for the quarter ended December 31, 2011 includes
an $11.0 million warranty recovery which contributed 590 bps to the margin



As of December31, 2012

  *Total cash and cash equivalents: $648.2 million, including unrestricted
    cash of approximately $396.7 million
  *Stockholders' equity: $242.6 million, not including $9.4 million of
    mandatory convertible subordinated notes, which converted to 408,790
    shares of common stock at maturity on January 15, 2013
  *Total backlog from continuing operations: 1,817 homes with a sales value
    of $478.3 million, compared to 1,307 homes with a sales value of $315.8
    million as of December31, 2011
  *Land and lots controlled: 25,104 lots (82.0% owned), a decrease of 3.4%
    from December31, 2011

Conference Call

The Company will hold a conference call on January 31, 2013 at 9:30 am EST 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 or
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 access the replay, dial 866-429-0570 or 203-369-0912 and enter
the passcode “3740” (available until 9:30 pm ET on February 7, 2013), or visit
www.beazer.com. A replay of the webcast will be available at www.beazer.com
for approximately 30 days.

Headquartered in Atlanta, Beazer Homes is one of the country's 10 largest
single-family homebuilders. The Company's homes meet or exceed the benchmark
for energy-efficient home construction as established by ENERGY STAR® and are
designed with flexible floorplan options to meet the personal preferences and
lifestyles of its buyers. In addition, the Company is committed to providing a
range of preferred lender choices to facilitate transparent competition
between lenders and enhanced customer service. The Company offers homes 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 under the ticker symbol “BZH.” For more info visit
Beazer.com, or check out Beazer on Facebook and Twitter.

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, changes in the level of housing starts, declines in employment
levels, inflation and changes in the demand and prices 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
                                                 December 31,
                                                 2012           2011
Total revenue                                    $ 246,902         $ 188,548
Home construction and land sales expenses        210,614           162,776
Inventory impairments and option contract        204              3,503     
abandonments
Gross profit                                     36,084            22,269
Commissions                                      10,642            8,371
General and administrative expenses              26,328            28,194
Depreciation and amortization                    2,715            2,403     
Operating loss                                   (3,601    )       (16,699   )
Equity in income (loss) of unconsolidated        36                (77       )
entities
Other expense, net                               (15,627   )       (18,273   )
Loss from continuing operations before income    (19,192   )       (35,049   )
taxes
Benefit from income taxes                        (253      )       (35,747   )
(Loss) income from continuing operations         (18,939   )       698
(Loss) income from discontinued operations, net  (1,449    )       41        
of tax
Net (loss) income                                $ (20,388 )       $ 739     
Weighted average number of shares:
Basic                                            24,294            14,833
Diluted                                          24,294            17,421
(Loss) earnings per share:
Basic (loss) earnings per share from continuing  $ (0.78   )       $ 0.05
operations
Basic (loss) earnings per share from             $ (0.06   )       $ —
discontinued operations
Basic (loss) earnings per share                  $ (0.84   )       $ 0.05
Diluted (loss) earnings per share from           $ (0.78   )       $ 0.04
continuing operations
Diluted (loss) earnings per share from           $ (0.06   )       $ —
discontinued operations
Diluted (loss) earnings per share                $ (0.84   )       $ 0.04
                                                 
                                                 
                                                 Three Months Ended
                                                 December 31,
                                                 2012              2011
Capitalized interest in inventory, beginning of  $ 38,190          $ 45,973
period
Interest incurred                                28,418            32,525
Capitalized interest impaired                    —                 (28       )
Interest expense not qualified for               (16,211   )       (19,117   )
capitalization and included as other expense
Capitalized interest amortized to house          (8,475    )       (12,843   )
construction and land sales expenses
Capitalized interest in inventory, end of period $ 41,922         $ 46,510  
                                                                             
                                                                             

BEAZER HOMES USA, INC.

UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS

(in thousands, except share and per share data)
                                                        
                                      December 31, 2012     September 30, 2012
ASSETS
Cash and cash equivalents             $   396,696           $   487,795
Restricted cash                       251,455               253,260
Accounts receivable (net of
allowance of $2,184 and $2,235,       23,484                24,599
respectively)
Income tax receivable                 2,513                 6,372
Inventory
Owned inventory                       1,141,691             1,099,132
Land not owned under option           9,205                12,420          
agreements
Total inventory                       1,150,896             1,111,552
Investments in unconsolidated         42,029                42,078
entities
Deferred tax assets, net              6,924                 6,848
Property, plant and equipment, net    18,054                18,974
Other assets                          29,473               30,740          
Total assets                          $   1,921,524        $   1,982,218   
                                                            
LIABILITIES AND STOCKHOLDERS’
EQUITY
Trade accounts payable                $   56,062            $   69,268
Other liabilities                     122,269               147,718
Obligations related to land not       3,625                 4,787
owned under option agreements
Total debt (net of discounts of       1,496,951            1,498,198       
$2,944 and $3,082, respectively)
Total liabilities                     $   1,678,907        $   1,719,971   
                                                            
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,                           25                    25
24,690,033 and 24,601,830 issued
and outstanding, respectively)
Paid-in capital                       834,752               833,994
Accumulated deficit                   (592,160       )      (571,772        )
Total stockholders’ equity            242,617              262,247         
Total liabilities and stockholders’   $   1,921,524        $   1,982,218   
equity
                                                            
Inventory Breakdown
Homes under construction              $   261,062           $   251,828
Development projects in progress      422,262               391,019
Land held for future development      367,245               367,102
Land held for sale                    8,576                 10,149
Capitalized interest                  41,922                38,190
Model homes                           40,624                40,844
Land not owned under option           9,205                12,420          
agreements
Total inventory                       $   1,150,896        $   1,111,552   
                                                                            
                                                                            

BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA– CONTINUING OPERATIONS
                                                  
                                                    Quarter Ended December 31,
SELECTED OPERATING DATA                             2012           2011
Closings:
West region                                         499              370
East region                                         353              310
Southeast region                                    186             187
Total closings                                      1,038           867
                                                                     
New orders, net of cancellations:
West region                                         424              303
East region                                         309              249
Southeast region                                    199             172
Total new orders                                    932             724
                                                                     
Backlog units at end of period:
West region                                         764              503
East region                                         703              577
Southeast region                                    350             227
Total backlog units                                 1,817           1,307
                                                                     
Dollar value of backlog at end of period (in        $  478.3        $ 315.8
millions)
                                                                     
Homebuilding Revenue (in thousands):
West region                                         $  109,753       $ 70,254
East region                                         96,464           81,767
Southeast region                                    38,208          34,831
Total homebuilding revenue                          $  244,425      $ 186,852
                                                                       
                                                                       

                             Quarter Ended December 31,
SUPPLEMENTAL FINANCIAL DATA   2012           2011
Revenues:
Homebuilding                  $  244,425       $ 186,852
Land sales and other          2,477           1,696
Total                         $  246,902      $ 188,548
                                               
Gross profit:
Homebuilding                  $  35,630        $ 21,352
Land sales and other          454             917
Total                         $  36,084       $ 22,269
                                                 
                                                 

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.
Management believes that this information assists investors in comparing the
operating characteristics of homebuilding activities by eliminating many of
the differences in companies' respective level of impairments and level of
debt. Homebuilding gross profit for the quarter ended December 31, 2011
included a $11.0 million warranty recovery which added 590 basis points to
homebuilding gross profit before I&A and interest amortized to cost of sales.

                                  Quarter Ended December 31,                
                                   2012                 2011              
Homebuilding gross profit          $ 35,630   14.6 %     $ 21,352   11.4 %
Inventory impairments and lot      204                    3,503    
option abandonments (I&A)
Homebuilding gross profit before   35,834       14.7 %     24,855       13.3 %
I&A
Interest amortized to cost of      8,475                  12,843   
sales
Homebuilding gross profit before
I&A and interest amortized to      $ 44,309    18.1 %     $ 37,698    20.2 %
cost of sales
                                                                             
                                                                             

Reconciliation of Adjusted EBITDA (earnings before interest, taxes,
depreciation, amortization and impairments) to total company net income (loss)
(including discontinued operations), 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 December 31,
                                                    2012           2011
Net (loss) income                                   $  (20,388 )     $ 739
Benefit from income taxes                           (275       )     (36,146 )
Interest amortized to home construction and land
sales expenses, capitalized interest                24,686           31,988
impaired, and interest expense not qualified for
capitalization
Depreciation and amortization and stock             3,499            3,703
compensation amortization
Inventory impairments and option contract           221              3,507
abandonments
Joint venture impairment and abandonment charges    —               29      
Adjusted EBITDA                                     $  7,743        $ 3,820 

Contact:

Beazer Homes USA, Inc.
Carey Phelps, 770-829-3700
Director, Investor Relations & Corporate Communications
investor.relations@beazer.com
 
Press spacebar to pause and continue. Press esc to stop.