Beazer Homes Reports Second Quarter Fiscal 2013 Results

  Beazer Homes Reports Second Quarter Fiscal 2013 Results

Business Wire

ATLANTA -- May 2, 2013

Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its
financial results for the quarter and six months ended March31, 2013.

"I'm pleased with our solid operational and financial performance this
quarter,” said Allan Merrill, CEO of Beazer Homes. “Improvements in closings,
average sales price and gross margins enabled us to generate $15 million in
adjusted EBITDA, the highest amount for our fiscal second quarter since 2007.
With a substantially higher backlog, improving margins and tight control of
fixed costs, we expect to report positive net income for our fiscal fourth
quarter, which should allow us to be profitable for the second half of fiscal
2013.”

Summary results for the quarter and six months ended March31, 2013 are as
follows (all per share amounts are calculated after giving effect to a 1-for-5
reverse stock split completed on October 11, 2012):

Q2 Results from Continuing Operations (unless otherwise specified)

                                         Quarter Ended March 31,
                                          2013        2012        Change
New Home Orders                           1,521         1,512         0.6    %
LTM orders per month per community        2.7           2.0           35.0   %
Cancellation rates                        18.7    %     22.5    %     -380 bps
                                                                      
Total Home Closings                       1,127         844           33.5   %
Average sales price from closings (in     $ 253.3       $ 224.7       12.7   %
thousands)
Homebuilding revenue (in millions)        $ 285.5       $ 189.6       50.6   %
Homebuilding gross profit margin,
excluding impairments and abandonments    15.9    %     10.9    %     500 bps
(I&A)
Homebuilding gross profit margin,
excluding I&A and interest amortized to   19.1    %     17.5    %     160 bps
cost of sales
                                                                      
Loss from continuing operations before    $ (19.5 )     $ (38.7 )     $ 19.2
income taxes (in millions)
Benefit from income taxes                 $ 0.3         $ 0.8         $ (0.5 )
Net loss from continuing operations (in   $ (19.1 )     $ (37.9 )     $ 18.8
millions)
Basic Per Share                           $ (0.78 )     $ (2.41 )     $ 1.63
Loss on debt extinguishment (in           $ (3.6  )     $ (2.7  )     $ (0.9 )
millions)
Inventory impairments (in millions)       $ (2.0  )     $ (1.2  )     $ (0.8 )
Net loss from continuing operations
excluding inventory impairments and       $ (13.5 )     $ (34.0 )     $ 20.5
loss on
debt extinguishment (in millions)
Land and land development spending (in    $ 62.6        $ 41.9        $ 20.7
millions)
Total Company Adjusted EBITDA (in         $ 15.2        $ (1.0  )     $ 16.2
millions)
                                                                             
                                                                             

Six Month Results from Continuing Operations (unless otherwise specified)

                                        Six Months Ended March 31,
                                         2013        2012        Change
New Home Orders                          2,453         2,236         9.7     %
LTM orders per month per community       2.7           2.0           35.0    %
Cancellation rates                       21.8    %     27.1    %     -530 bps
                                                                     
Total Home Closings                      2,165         1,711         26.5    %
Average sales price from closings (in    $ 244.8       $ 220.0       11.3    %
thousands)
Homebuilding revenue (in millions)       $ 529.9       $ 376.5       40.8    %
Homebuilding gross profit margin,
excluding impairments and abandonments   15.3    %     12.1    %     320 bps
(I&A) (a)
Homebuilding gross profit margin,
excluding I&A and interest amortized     18.7    %     18.9    %     -20 bps
to cost of sales (a)
                                                                     
Loss from continuing operations before   $ (38.6 )     $ (73.8 )     $ 35.2
income taxes (in millions)
Benefit from income taxes                $ 0.6         $ 36.6        $ (36.0 )
Net loss from continuing operations      $ (38.1 )     $ (37.2 )     $ (0.9  )
(in millions)
Basic Per Share                          $ (1.55 )     $ (2.43 )     $ 0.88
Loss on debt extinguishment (in          $ (3.6  )     $ (2.7  )     $ (0.9  )
millions)
Inventory impairments (in millions)      $ (2.2  )     $ (4.7  )     $ 2.5
Net loss from continuing operations
excluding inventory impairments and      $ (32.3 )     $ (29.8 )     $ (2.5  )
loss on
debt extinguishment (in millions)
Land and land development spending (in   $ 152.6       $ 100.1       $ 52.5
millions)
Total Company Adjusted EBITDA (in        $ 23.0        $ 2.8         $ 20.2
millions)
                                                                             
                                                                             

(a) This homebuilding gross profit for the six months ended March 31, 2012
includes an $11.0 million warranty recovery which contributed 300 bps to this
margin.

As of March31, 2013

  *Total cash and cash equivalents: $672.4 million, including unrestricted
    cash of approximately $425.7 million
  *Stockholders' equity: $233.2 million
  *Total backlog from continuing operations: 2,211 homes with a sales value
    of $584.2 million, compared to 1,975 homes with a sales value of $465.0
    million as of March31, 2012
  *Land and lots controlled: 24,693 lots (83.1% owned), a decrease of 3.6%
    from March31, 2012

Conference Call

The Company will hold a conference call on May 2, 2013 at 10:00 am ET to
discuss these results. Interested parties may listen to the conference call
and view the Company's slide presentation over the internet on the "Investor
Relations" page of the Company's website, www.beazer.com. In addition, the
conference call will be available by telephone at 800-619-8639 (for
international callers, dial 312-470-7002). To be admitted to the call,
verbally supply the pass code "BZH". A replay of the conference call will be
available, until 11:00 PM ET on May 9, 2013, at 800-677-4960 (for
international callers, dial 203-369-3932) with pass code “3740.” 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              Six Months Ended
                   March 31,                       March 31,
                   2013          2012            2013          2012
Total revenue      $ 287,902       $ 191,643       $ 534,804       $ 380,191
Home construction
and land sales     241,992         170,283         452,606         333,059
expenses
Inventory
impairments and    2,025          1,170          2,229          4,673     
option contract
abandonments
Gross profit       43,885          20,190          79,969          42,459
Commissions        11,686          8,375           22,328          16,746
General and
administrative     28,795          26,319          55,123          54,513
expenses
Depreciation and   3,093          3,190          5,808          5,593     
amortization
Operating income   311             (17,694   )     (3,290    )     (34,393   )
(loss)
Equity in income
(loss) of          68              4               104             (73       )
unconsolidated
entities
Loss on
extinguishment of  (3,638    )     (2,747    )     (3,638    )     (2,747    )
debt
Other expense, net (16,195   )     (18,265   )     (31,822   )     (36,538   )
Loss from
continuing         (19,454   )     (38,702   )     (38,646   )     (73,751   )
operations before
income taxes
Benefit from       (343      )     (836      )     (596      )     (36,583   )
income taxes
Loss from
continuing         (19,111   )     (37,866   )     (38,050   )     (37,168   )
operations
Loss from
discontinued       (529      )     (2,082    )     (1,978    )     (2,041    )
operations, net of
tax
Net loss           $ (19,640 )     $ (39,948 )     $ (40,028 )     $ (39,209 )
Weighted average
number of shares:
Basic              24,654          15,711          24,472          15,269
Diluted            24,654          15,711          24,472          15,269
(Loss) earnings
per share:
Basic loss per
share from         $ (0.78   )     $ (2.41   )     $ (1.55   )     $ (2.43   )
continuing
operations
Basic loss per
share from         $ (0.02   )     $ (0.13   )     $ (0.09   )     $ (0.14   )
discontinued
operations
Basic loss per     $ (0.80   )     $ (2.54   )     $ (1.64   )     $ (2.57   )
share
Diluted loss per
share from         $ (0.78   )     $ (2.41   )     $ (1.55   )     $ (2.43   )
continuing
operations
Diluted loss per
share from         $ (0.02   )     $ (0.13   )     $ (0.09   )     $ (0.14   )
discontinued
operations
Diluted loss per   $ (0.80   )     $ (2.54   )     $ (1.64   )     $ (2.57   )
share
                                                                             
                                                                             

                       Three Months Ended          Six Months Ended
                       March 31,                    March 31,
                       2013         2012           2013         2012
Capitalized interest
in inventory,          $ 41,922       $ 46,510       $ 38,190       $ 45,973
beginning of period
Interest incurred      29,177         32,190         57,595         64,715
Capitalized interest   —              (25      )     —              (53      )
impaired
Interest expense not
qualified for
capitalization and     (16,246  )     (18,797  )     (32,457  )     (37,914  )
included as other
expense
Capitalized interest
amortized to house     (9,352   )     (12,636  )     (17,827  )     (25,479  )
construction and land
sales expenses
Capitalized interest
in inventory, end of   $ 45,501      $ 47,242      $ 45,501      $ 47,242 
period
                                                                             
                                                                             

BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands, except share and per share data)
                                                        
                                         March 31, 2013     September 30, 2012
ASSETS
Cash and cash equivalents                $  425,660         $   487,795
Restricted cash                          246,742            253,260
Accounts receivable (net of allowance    25,070             24,599
of $2,051 and $2,235, respectively)
Income tax receivable                    2,513              6,372
Inventory
Owned inventory                          1,143,737          1,099,132
Land not owned under option agreements   8,375             12,420          
Total inventory                          1,152,112          1,111,552
Investments in unconsolidated entities   41,814             42,078
Deferred tax assets, net                 7,000              6,848
Property, plant and equipment, net       16,928             18,974
Other assets                             28,871            30,740          
Total assets                             $  1,946,710      $   1,982,218   
                                                            
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable                   $  62,235          $   69,268
Other liabilities                        140,802            147,718
Obligations related to land not owned    3,286              4,787
under option agreements
Total debt (net of discounts of $2,440   1,507,153         1,498,198       
and $3,082, respectively)
Total liabilities                        $  1,713,476      $   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, 63,000,000 shares authorized,     25                 25
25,092,502 and 24,601,830 issued and
outstanding, respectively)
Paid-in capital                          845,009            833,994
Accumulated deficit                      (611,800     )     (571,772        )
Total stockholders’ equity               233,234           262,247         
Total liabilities and stockholders’      $  1,946,710      $   1,982,218   
equity
                                                            
Inventory Breakdown
Homes under construction                 $  271,882         $   251,828
Development projects in progress         420,914            391,019
Land held for future development         355,613            367,102
Land held for sale                       10,413             10,149
Capitalized interest                     45,501             38,190
Model homes                              39,414             40,844
Land not owned under option agreements   8,375             12,420          
Total inventory                          $  1,152,112      $   1,111,552   
                                                                            
                                                                            

BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
($ in thousands, except otherwise noted)
                                                
                    Quarter Ended March 31,         Six Months Ended March 31,
SELECTED            2013          2012            2013           2012
OPERATING DATA
Closings:
West region         504             369             1,003            739
East region         383             292             736              602
Southeast region    240            183            426             370
Total closings      1,127          844            2,165           1,711
                                                                     
New orders, net
of cancellations:
West region         658             655             1,082            958
East region         442             502             751              751
Southeast region    421            355            620             527
Total new orders    1,521          1,512          2,453           2,236
                                                                     
Backlog units at
end of period:
West region         918             789             918              789
East region         762             787             762              787
Southeast region    531            399            531             399
Total backlog       2,211          1,975          2,211           1,975
units
                                                                     
Dollar value of
backlog at end of   $ 584.2        $ 465.0        $  584.2        $ 465.0
period (in
millions)
                                                                     
Homebuilding
Revenue:
West region         $ 117,496       $ 77,810        $  227,249       $ 148,064
East region         116,537         74,902          213,001          156,669
Southeast region    51,438         36,905         89,646          71,736
Total
homebuilding        $ 285,471      $ 189,617      $  529,896      $ 376,469
revenue
                                                                       
                                                                       

                   Quarter Ended March 31,       Six Months Ended March 31,
SUPPLEMENTAL        2013          2012            2013           2012
FINANCIAL DATA
Revenues:
Homebuilding        $ 285,471       $ 189,617       $  529,896       $ 376,469
Land sales and      2,431          2,026          4,908           3,722
other
Total               $ 287,902      $ 191,643      $  534,804      $ 380,191
                                                                     
Gross profit:
Homebuilding        $ 43,253        $ 19,467        $  78,883        $ 40,819
Land sales and      632            723            1,086           1,640
other
Total               $ 43,885       $ 20,190       $  79,969       $ 42,459
                                                                       
                                                                       

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 six months ended March 31, 2012
included an $11.0 million warranty recovery which added 300 basis points to
homebuilding gross profit before impairments and abandonments and interest
amortized to cost of sales.

              Quarter Ended March 31,                       Six Months Ended March 31,
               2013                  2012                    2013                  2012
Homebuilding   $ 43,253   15.2 %     $ 19,467   10.3 %     $ 78,883   14.9 %     $ 40,819  10.8 %
gross profit
Inventory
impairments
and lot        2,025                  1,170                  2,229                  4,673    
option
abandonments
(I&A)
Homebuilding
gross profit   45,278       15.9 %     20,637       10.9 %     81,112       15.3 %     45,492     12.1 %
before I&A
Interest
amortized to   9,352                  12,636                 17,827                 25,479   
cost of
sales
Homebuilding
gross profit
before I&A
and interest   $ 54,630    19.1 %     $ 33,273    17.5 %     $ 98,939    18.7 %     $ 70,971  18.9 %
amortized to
cost of
sales
                                                                                                       
                                                                                                       

Reconciliation of Adjusted EBITDA (earnings before interest, taxes,
depreciation, amortization, debt extinguishment, impairments and abandonments)
to total company net 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 March 31,    Six Months Ended March 31,
                        2013         2012          2013          2012
Net loss                $ (19,640 )   $ (39,948 )   $  (40,028 )   $ (39,209 )
Benefit from income     (352      )   (850      )   (627       )   (36,996   )
taxes
Interest amortized to
home construction and
land sales expenses,
capitalized interest    25,598        31,458        50,284         63,446
impaired, and
interest expense not
qualified for
capitalization
Depreciation and
amortization and        3,947         4,423         7,446          8,126
stock compensation
amortization
Inventory impairments
and option contract     2,025         1,147         2,246          4,654
abandonments
Loss on debt            3,638         2,747         3,638          2,747
extinguishment
Joint venture
impairment and          —            7            —             36        
abandonment charges
Adjusted EBITDA         $ 15,216     $ (1,016  )   $  22,959     $ 2,804   

Contact:

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