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Beazer Homes Reports Improved Third Quarter Results Highlighted by Higher Margins and Faster Sales Pace



  Beazer Homes Reports Improved Third Quarter Results Highlighted by Higher
  Margins and Faster Sales Pace

Business Wire

ATLANTA -- August 1, 2013

Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its
financial results for the quarter and nine months ended June 30, 2013.

The Company's third quarter results included notable progress on its
Path-to-Profitability strategies, including increased margins and higher sales
per active community. Adjusted EBITDA was $21.8 million for the quarter, up
from $4.0 million in the third quarter of Fiscal 2012. Year-to-date orders
were up slightly over last year, while orders for the third quarter were down
year-over-year due to an expected decline in community count. With an
aggressive land acquisition strategy underway, the Company expects a
materially higher community count by the end of Fiscal 2014.

“We were pleased with the continued improvement in both our key operational
metrics and our financial results for the third quarter,” said Allan Merrill,
CEO of Beazer Homes. “With improved homebuilding gross margins, higher average
sales prices and strict control over operating expenses, we are poised to
report positive net income in our fiscal fourth quarter and expect to report
our first full year of profitability in nearly a decade for fiscal 2014.”

Summary results for the quarter and nine months ended June 30, 2013 are as
follows (per share amounts are calculated after giving effect to a 1-for-5
reverse stock split completed on October 11, 2012, as applicable):

Q3 Results from Continuing Operations (unless otherwise specified)

                                        Quarter Ended June 30,
                                        2013          2012          Change
New Home Orders                         1,381         1,555         (11.2   )%
LTM orders per month per community      2.7           2.2           22.7    %
Cancellation rates                      20.0    %     24.5    %     -450 bps
                                                                     
Total Home Closings                     1,234         1,109         11.3    %
Average sales price from closings (in   $ 253.8       $ 227.3       11.7    %
thousands)
Homebuilding revenue (in millions)      $ 313.1       $ 252.1       24.2    %
Homebuilding gross profit margin,
excluding impairments and               17.1    %     10.5    %     660 bps
abandonments (I&A)
Homebuilding gross profit margin,
excluding I&A and interest amortized    20.3    %     16.7    %     360 bps
to cost of sales
                                                                     
Loss from continuing operations         $ (5.9  )     $ (37.9 )     $ 32.0
before income taxes (in millions)
Benefit from (provision for) income     $ 0.4         $ (0.1  )     $ 0.5
taxes (in millions)
Net loss from continuing operations     $ (5.4  )     $ (38.0 )     $ 32.6
(in millions)
Basic Loss Per Share                    $ (0.22 )     $ (1.92 )     $ 1.70
Inventory impairments (in millions)     $ —           $ (5.8  )     $ 5.8
Net loss from continuing operations
excluding inventory impairments (in     $ (5.4  )     $ (32.2 )     $ 26.8
millions)
Land and land development spending      $ 161.8       $ 40.5        $ 121.3
(in millions)
Total Company Adjusted EBITDA (in       $ 21.8        $ 4.0         $ 17.8
millions)
                                                                             
                                                                             

Nine Month Results from Continuing Operations (unless otherwise specified)

                                        Nine Months Ended June 30,
                                        2013          2012           Change
New Home Orders                         3,834         3,791          1.1     %
LTM orders per month per community      2.7           2.2            22.7    %
Cancellation rates                      21.1    %     26.0     %     -490 bps
                                                                      
Total Home Closings                     3,399         2,820          20.5    %
Average sales price from closings (in   $ 248.0       $ 222.9        11.3    %
thousands)
Homebuilding revenue (in millions)      $ 843.0       $ 628.5        34.1    %
Homebuilding gross profit margin,
excluding impairments and               16.0    %     11.4     %     460 bps
abandonments (I&A) (a)
Homebuilding gross profit margin,
excluding I&A and interest amortized    19.3    %     18.0     %     130 bps
to cost of sales (a)
                                                                      
Loss from continuing operations         $ (44.5 )     $ (111.7 )     $ 67.2
before income taxes (in millions)
Benefit from income taxes (in           $ 1.0         $ 36.4         $ (35.4 )
millions)
Net loss from continuing operations     $ (43.5 )     $ (75.3  )     $ 31.8
(in millions)
Basic Loss Per Share                    $ (1.77 )     $ (4.48  )     $ 2.71
Loss on debt extinguishment (in         $ (3.6  )     $ (2.7   )     $ (0.9  )
millions)
Inventory impairments (in millions)     $ (2.2  )     $ (10.5  )     $ 8.3
Net loss from continuing operations
excluding inventory impairments and     $ (37.7 )     $ (62.1  )     $ 24.4
loss on debt extinguishment (in
millions)
Land and land development spending      $ 314.4       $ 140.6        $ 173.8
(in millions)
Total Company Adjusted EBITDA (in       $ 44.7        $ 6.8          $ 37.9
millions)
                                                                              
                                                                              

(a) This homebuilding gross profit for the nine months ended June 30, 2012
includes an $11.0 million warranty recovery which contributed 180 bps to this
margin.

As of June 30, 2013

  * Total cash and cash equivalents: $544.4 million, including unrestricted
    cash of approximately $298.3 million
  * Stockholders' equity: $228.0 million
  * Total backlog from continuing operations: 2,358 homes with a sales value
    of $646.1 million, compared to 2,421 homes with a sales value of $572.8
    million as of June 30, 2012
  * Land and lots controlled: 26,966 lots (79.4% owned), an increase of 7.5%
    from June 30, 2012

Conference Call

The Company will hold a conference call on August 1, 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 5:00 PM ET on August 8, 2013, at 888-566-0432 (for
international callers, dial 203-369-3046) 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              Nine Months Ended
                   June 30,                        June 30,
                   2013            2012            2013            2012
Total revenue      $ 314,439       $ 254,555       $ 849,243       $ 634,746
Home construction
and land sales     260,324         227,505         712,930         560,564
expenses
Inventory
impairments and    —               5,819           2,229           10,492     
option contract
abandonments
Gross profit       54,115          21,231          134,084         63,690
Commissions        13,078          10,776          35,406          27,522
General and
administrative     29,612          27,867          84,735          82,380
expenses
Depreciation and   2,953           3,743           8,761           9,336      
amortization
Operating income   8,472           (21,155   )     5,182           (55,548   )
(loss)
Equity in (loss)
income of          (310      )     48              (206      )     (25       )
unconsolidated
entities
Loss on
extinguishment of  —               —               (3,638    )     (2,747    )
debt
Other expense, net (14,036   )     (16,804   )     (45,858   )     (53,342   )
Loss from
continuing         (5,874    )     (37,911   )     (44,520   )     (111,662  )
operations before
income taxes
(Benefit from)
provision for      (432      )     145             (1,028    )     (36,438   )
income taxes
Loss from
continuing         (5,442    )     (38,056   )     (43,492   )     (75,224   )
operations
Loss from
discontinued       (346      )     (1,828    )     (2,324    )     (3,869    )
operations, net of
tax
Net loss           $ (5,788  )     $ (39,884 )     $ (45,816 )     $ (79,093 )
Weighted average
number of shares:
Basic and Diluted  24,770          19,810          24,571          16,777
Basic and Diluted
loss per share:
Continuing         $ (0.22   )     $ (1.92   )     $ (1.77   )     $ (4.48   )
Operations
Discontinued       $ (0.01   )     $ (0.09   )     $ (0.09   )     $ (0.23   )
Operations
Total              $ (0.23   )     $ (2.01   )     $ (1.86   )     $ (4.71   )
                                                                              
                                                                              

                       Three Months Ended            Nine Months Ended
                       June 30,                      June 30,
                       2013           2012           2013           2012
Capitalized interest
in inventory,          $ 45,501       $ 47,242       $ 38,190       $ 45,973
beginning of period
Interest incurred      28,766         31,235         86,361         95,950
Capitalized interest   —              (222     )     —              (275     )
impaired
Interest expense not
qualified for
capitalization and     (14,252  )     (17,233  )     (46,709  )     (55,147  )
included as other
expense
Capitalized interest
amortized to house     (9,996   )     (15,649  )     (27,823  )     (41,128  )
construction and land
sales expenses
Capitalized interest
in inventory, end of   $ 50,019       $ 45,373       $ 50,019       $ 45,373  
period
                                                                              
                                                                              

BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands, except share and per share data)
                                                           
                                          June 30, 2013     September 30, 2012
ASSETS
Cash and cash equivalents                 $ 298,346         $   487,795
Restricted cash                           246,013           253,260
Accounts receivable (net of allowance     26,066            24,599
of $2,045 and $2,235, respectively)
Income tax receivable                     3,080             6,372
Inventory
Owned inventory                           1,265,112         1,099,132
Land not owned under option agreements    7,880             12,420           
Total inventory                           1,272,992         1,111,552
Investments in unconsolidated entities    42,477            42,078
Deferred tax assets, net                  7,076             6,848
Property, plant and equipment, net        16,734            18,974
Other assets                              30,133            30,740           
Total assets                              $ 1,942,917       $   1,982,218    
                                                             
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable                    $ 79,625          $   69,268
Other liabilities                         126,746           147,718
Obligations related to land not owned     2,904             4,787
under option agreements
Total debt (net of discounts of $2,341    1,505,656         1,498,198        
and $3,082, respectively)
Total liabilities                         $ 1,714,931       $   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,
25,090,653                                25                25
and 24,601,830 issued and outstanding,
respectively)
Paid-in capital                           845,549           833,994
Accumulated deficit                       (617,588    )     (571,772        )
Total stockholders’ equity                227,986           262,247          
Total liabilities and stockholders’       $ 1,942,917       $   1,982,218    
equity
                                                             
Inventory Breakdown
Homes under construction                  $ 324,619         $   251,828
Development projects in progress          498,363           391,019
Land held for future development          341,995           367,102
Land held for sale                        10,648            10,149
Capitalized interest                      50,019            38,190
Model homes                               39,468            40,844
Land not owned under option agreements    7,880             12,420           
Total inventory                           $ 1,272,992       $   1,111,552    
                                                                             
                                                                             

BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
($ in thousands, except otherwise noted)
                                                   
                    Quarter Ended June 30,          Nine Months Ended June 30,
SELECTED            2013            2012            2013             2012
OPERATING DATA
Closings:
West region         550             455             1,553            1,194
East region         370             382             1,106            984
Southeast region    314             272             740              642
Total closings      1,234           1,109           3,399            2,820
                                                                      
New orders, net
of cancellations:
West region         614             730             1,696            1,688
East region         389             486             1,140            1,237
Southeast region    378             339             998              866
Total new orders    1,381           1,555           3,834            3,791
                                                                      
Backlog units at
end of period:
West region         982             1,064           982              1,064
East region         781             891             781              891
Southeast region    595             466             595              466
Total backlog       2,358           2,421           2,358            2,421
units
                                                                      
Dollar value of
backlog at end of   $ 646.1         $ 572.8         $  646.1         $ 572.8
period (in
millions)
                                                                      
Homebuilding
Revenue:
West region         $ 132,803       $ 97,356        $  360,052       $ 245,420
East region         111,333         98,850          324,334          255,519
Southeast region    68,993          55,865          158,639          127,601
Total
homebuilding        $ 313,129       $ 252,071       $  843,025       $ 628,540
revenue
                                                                        
                                                                        

                    Quarter Ended June 30,          Nine Months Ended June 30,
SUPPLEMENTAL        2013            2012            2013             2012
FINANCIAL DATA
Revenues:
Homebuilding        $ 313,129       $ 252,071       $  843,025       $ 628,540
Land sales and      1,310           2,484           6,218            6,206
other
Total               $ 314,439       $ 254,555       $  849,243       $ 634,746
                                                                      
Gross profit:
Homebuilding        $ 53,588        $ 20,656        $  132,471       $ 61,475
Land sales and      527             575             1,613            2,215
other
Total               $ 54,115        $ 21,231        $  134,084       $ 63,690
                                                                        
                                                                        

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 nine months ended June 30, 2012
included an $11.0 million warranty recovery which added 180 basis points to
homebuilding gross profit before impairments and abandonments and interest
amortized to cost of sales.

               Quarter Ended June 30,                          Nine Months Ended June 30,                   
               2013                    2012                    2013                     2012                
Homebuilding   $ 53,588     17.1 %     $ 20,656     8.2  %     $ 132,471     15.7 %     $ 61,475      9.8  %
gross profit
Inventory
impairments
and lot        —                       5,819                   2,229                    10,492     
option
abandonments
(I&A)
Homebuilding
gross profit   53,588       17.1 %     26,475       10.5 %     134,700       16.0 %     71,967        11.4 %
before I&A
Interest
amortized to   9,996                   15,649                  27,823                   41,128     
cost of
sales
Homebuilding
gross profit
before I&A
and interest   $ 63,584     20.3 %     $ 42,124     16.7 %     $ 162,523     19.3 %     $ 113,095     18.0 %
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 June 30,         Nine Months Ended June 30,
                    2013           2012            2013            2012
Net loss            $ (5,788 )     $ (39,884 )     $ (45,816 )     $ (79,093 )
Benefit from        (470     )     150             (1,097    )     (36,846   )
income taxes
Interest
amortized to home
construction and
land sales
expenses,
capitalized         24,248         33,104          74,532          96,550
interest
impaired, and
interest
expense not
qualified for
capitalization
Depreciation and
amortization and
stock
compensation
amortization        3,590          4,456           11,036          12,582
Inventory
impairments and     —              6,142           2,246           10,796
option contract
abandonments
Loss on debt        —              —               3,638           2,747
extinguishment
Joint venture
impairment and      181            —               181             36         
abandonment
charges
Adjusted EBITDA     $ 21,761       $ 3,968         $ 44,720        $ 6,772    

Contact:

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