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 community
|
|
2.5
|
|
|
|
1.9
|
|
|
|
31.6
|
%
|
Cancellation rates
|
|
26.4
|
%
|
|
|
35.1
|
%
|
|
|
-730
|
bps
|
|
|
|
|
|
|
|
|
|
|
Total Home Closings
|
|
1,038
|
|
|
|
867
|
|
|
|
19.7
|
%
|
Average sales price from closings (in thousands)
|
|
$
|
235.5
|
|
|
|
$
|
215.5
|
|
|
|
9.3
|
%
|
Homebuilding revenue (in millions)
|
|
$
|
244.4
|
|
|
|
$
|
186.9
|
|
|
|
30.8
|
%
|
Homebuilding gross profit margin, excluding impairments and
abandonments (I&A) (a)
|
|
14.7
|
%
|
|
|
13.3
|
%
|
|
|
140
|
bps
|
Homebuilding gross profit margin, excluding I&A and interest
amortized to cost of sales (a)
|
|
18.1
|
%
|
|
|
20.2
|
%
|
|
|
-210
|
bps
|
|
|
|
|
|
|
|
|
|
|
Loss from continuing operations before income taxes (in millions)
|
|
$
|
(19.2
|
)
|
|
|
$
|
(35.0
|
)
|
|
|
$
|
15.8
|
|
Net (loss) income from continuing operations (in millions)
|
|
$
|
(18.9
|
)
|
|
|
$
|
0.7
|
|
|
|
$
|
(19.6
|
)
|
Basic Per Share
|
|
$
|
(0.78
|
)
|
|
|
$
|
0.05
|
|
|
|
$
|
(0.83
|
)
|
Inventory impairments (in millions)
|
|
$
|
(0.2
|
)
|
|
|
$
|
(3.5
|
)
|
|
|
$
|
3.3
|
|
Net (loss) income from continuing operations excluding inventory
impairments (in millions)
|
|
$
|
(18.7
|
)
|
|
|
$
|
4.2
|
|
|
|
$
|
(22.9
|
)
|
Land and land development spending (in millions)
|
|
$
|
90.0
|
|
|
|
$
|
58.2
|
|
|
|
$
|
31.8
|
|
Adjusted EBITDA (in millions)
|
|
$
|
7.7
|
|
|
|
$
|
3.8
|
|
|
|
$
|
3.9
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 December 31, 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 December 31, 2011
-
Land and lots controlled: 25,104 lots (82.0% owned), a decrease of
3.4% from December 31, 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 abandonments
|
204
|
|
|
|
|
3,503
|
|
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 entities
|
36
|
|
|
|
|
(77
|
)
|
Other expense, net
|
(15,627
|
)
|
|
|
|
(18,273
|
)
|
Loss from continuing operations before income taxes
|
(19,192
|
)
|
|
|
|
(35,049
|
)
|
Benefit from income taxes
|
(253
|
)
|
|
|
|
(35,747
|
)
|
(Loss) income from continuing operations
|
(18,939
|
)
|
|
|
|
698
|
|
(Loss) income from discontinued operations, net of tax
|
(1,449
|
)
|
|
|
|
41
|
|
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 operations
|
$
|
(0.78
|
)
|
|
|
|
$
|
0.05
|
|
Basic (loss) earnings per share from discontinued operations
|
$
|
(0.06
|
)
|
|
|
|
$
|
—
|
|
Basic (loss) earnings per share
|
$
|
(0.84
|
)
|
|
|
|
$
|
0.05
|
|
Diluted (loss) earnings per share from continuing operations
|
$
|
(0.78
|
)
|
|
|
|
$
|
0.04
|
|
Diluted (loss) earnings per share from discontinued operations
|
$
|
(0.06
|
)
|
|
|
|
$
|
—
|
|
Diluted (loss) earnings per share
|
$
|
(0.84
|
)
|
|
|
|
$
|
0.04
|
|
|
|
|
|
|
Three Months Ended
|
|
December 31,
|
|
2012
|
|
|
|
2011
|
Capitalized interest in inventory, beginning of period
|
$
|
38,190
|
|
|
|
|
$
|
45,973
|
|
Interest incurred
|
28,418
|
|
|
|
|
32,525
|
|
Capitalized interest impaired
|
—
|
|
|
|
|
(28
|
)
|
Interest expense not qualified for capitalization and included as
other expense
|
(16,211
|
)
|
|
|
|
(19,117
|
)
|
Capitalized interest amortized to house construction and land sales
expenses
|
(8,475
|
)
|
|
|
|
(12,843
|
)
|
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,
respectively)
|
|
23,484
|
|
|
|
24,599
|
|
Income tax receivable
|
|
2,513
|
|
|
|
6,372
|
|
Inventory
|
|
|
|
|
|
Owned inventory
|
|
1,141,691
|
|
|
|
1,099,132
|
|
Land not owned under option agreements
|
|
9,205
|
|
|
|
12,420
|
|
Total inventory
|
|
1,150,896
|
|
|
|
1,111,552
|
|
Investments in unconsolidated entities
|
|
42,029
|
|
|
|
42,078
|
|
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 owned under option agreements
|
|
3,625
|
|
|
|
4,787
|
|
Total debt (net of discounts of $2,944 and $3,082, respectively)
|
|
1,496,951
|
|
|
|
1,498,198
|
|
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, 24,690,033 and 24,601,830 issued and outstanding,
respectively)
|
|
25
|
|
|
|
25
|
|
Paid-in capital
|
|
834,752
|
|
|
|
833,994
|
|
Accumulated deficit
|
|
(592,160
|
)
|
|
|
(571,772
|
)
|
Total stockholders’ equity
|
|
242,617
|
|
|
|
262,247
|
|
Total liabilities and stockholders’ equity
|
|
$
|
1,921,524
|
|
|
|
$
|
1,982,218
|
|
|
|
|
|
|
|
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 agreements
|
|
9,205
|
|
|
|
12,420
|
|
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 millions)
|
|
$
|
478.3
|
|
|
|
$
|
315.8
|
|
|
|
|
|
|
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 option abandonments (I&A)
|
|
204
|
|
|
|
|
|
3,503
|
|
|
|
Homebuilding gross profit before I&A
|
|
35,834
|
|
|
14.7
|
%
|
|
|
24,855
|
|
|
13.3
|
%
|
Interest amortized to cost of sales
|
|
8,475
|
|
|
|
|
|
12,843
|
|
|
|
Homebuilding gross profit before I&A and interest amortized to cost
of sales
|
|
$
|
44,309
|
|
|
18.1
|
%
|
|
|
$
|
37,698
|
|
|
20.2
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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 impaired, and interest expense not
qualified for capitalization
|
|
24,686
|
|
|
|
31,988
|
|
Depreciation and amortization and stock compensation amortization
|
|
3,499
|
|
|
|
3,703
|
|
Inventory impairments and option contract abandonments
|
|
221
|
|
|
|
3,507
|
|
Joint venture impairment and abandonment charges
|
|
—
|
|
|
|
29
|
|
Adjusted EBITDA
|
|
$
|
7,743
|
|
|
|
$
|
3,820
|
|