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 email@example.com
Beazer Homes Reports First Quarter Fiscal 2013 Results
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