Beazer Homes Reports Fourth Quarter and Full Year Fiscal 2012 Results

Beazer Homes Reports Fourth Quarter and Full Year Fiscal 2012 Results

ATLANTA--(BUSINESS WIRE)-- Beazer Homes USA, Inc. (NYS: BZH) ( today announced its financial results for the quarter and fiscal year ended September 30, 2012.

"I'm pleased with the significant progress we made in 2012 strengthening both our business and our balance sheet," said Allan Merrill, President and Chief Executive Officer of Beazer Homes. "Operationally, we generated significant growth in orders, closings and backlog, while seeing improving trends in gross margins. From a balance sheet perspective, we added liquidity, improved our book value, extended debt maturities and reduced interest expense."

"In 2013, we expect to meaningfully improve our EBITDA, primarily by achieving margin expansion and further improvement in our sales per community metrics. While our community count will likely decrease for much of the year, we are actively investing in a substantial number of new communities, which we expect to deliver closings starting in fiscal year 2014."

Summary results of the fiscal year and quarter are as follows (all per share amounts are calculated after giving effect to a 1-for-5 reverse stock split completed subsequent to September 30, 2012):

Full Year Results from Continuing Operations (unless otherwise specified)

 Year Ended September 30,
2012 2011 Change
New Home Orders4,9013,92724.8%
Average community count178179(0.6)%
Orders per month per community2.31.827.8%
Cancellation rates27.2%27.0%



Total Home Closings4,4283,24936.3%
Average sales price from closings (in thousands)$224.9$219.42.5%
Homebuilding revenue (in millions)$996.1$712.739.8%
Homebuilding gross profit margin, excluding impairments and
Homebuilding gross profit margin, excluding impairments,
abandonments and interest amortized to cost of sales17.7%17.2%50bps
Net loss from continuing operations (in millions)$(135.6)$(200.2)$64.6
Per Share$(7.34)$(13.53)$6.19
Loss on debt extinguishment (in millions)$(45.1)$(2.9)$(42.2)
Inventory impairments (in millions)$(12.2)$(32.5)$20.3
Net (loss) income from continuing operations excluding loss on debt
extinguishment and inventory impairments (in millions)$(78.3)$(164.8)$86.5
Land and land development spending (in millions)$185.5$221.6$(36.1)
Adjusted EBITDA (in millions)$21.8$(24.9)$46.7

Q4 Results from Continuing Operations (unless otherwise specified)

 Quarter Ended September 30,
2012 2011 Change
New Home Orders1,1101,00610.3%
Average community count163184(11.4)%
Orders per month per community2.31.827.8%
Cancellation rates31.1%34.2%



Total Home Closings1,6081,37616.9%
Average sales price from closings (in thousands)$228.6$228.10.2%
Homebuilding revenue (in millions)$367.5$313.817.1%
Homebuilding gross profit margin, excluding impairments and
Homebuilding gross profit margin, excluding impairments,
abandonments and interest amortized to cost of sales17.2%16.3%90bps
Net loss from continuing operations (in millions)$(60.4)$(42.4)$(18.0)
Per Share$(2.57)$(2.86)$0.29
Loss on debt extinguishment (in millions)$(42.4)$$(42.4)
Inventory impairments (in millions)$(1.7)$(7.1)$5.4
Net (loss) income from continuing operations excluding loss on debt
extinguishment and inventory impairments (in millions)$(16.3)$(35.3)$19.0
Land and land development spending (in millions)$45.0$43.6$1.4
Adjusted EBITDA (in millions)$15.1$8.9$6.2

As of September 30, 2012

  • Total cash and cash equivalents: $741.1 million, including unrestricted cash of approximately $487.8 million
  • Stockholders' equity: $262.2 million, not including $9.4 million of mandatory convertible subordinated notes, which automatically convert to common stock at maturity in 2013
  • Total backlog from continuing operations: 1,923 homes with a sales value of $479.1 million, compared to 1,450 homes with a sales value of $334.5 million as of September 30, 2011
  • Land and lots controlled: 24,147 lots (82.6% owned), a decrease of 9.5% from September 30, 2011

Capital Markets Activity

During the quarter ended September 30, 2012, we engaged in several capital raising transactions designed to further strengthen our balance sheet and position us to better participate in the emerging housing recovery. During July, we completed underwritten public offerings of 4.4 million (split-adjusted) shares of Beazer common stock at $14.50 per share, totaling $63.8 million, 4.6 million 7.50% tangible equity units, totaling $115.0 million, and a private placement of $300 million of 6.625% senior secured notes due 2018, generating approximately $466 million of proceeds, net of the offering fees and expenses. A portion of these proceeds were used to fund the redemption of our $250 million 12% senior secured notes due 2017 and to repurchase $15 million of our 9 1/8% senior unsecured notes due 2019. The remaining funds will be used to expand our new home community count in targeted markets and for general corporate purposes. The capital market transactions completed in fiscal 2012 are expected to reduce the Company's annual interest expense obligation by approximately $15 million.

Also, while we believe we possess sufficient liquidity to participate in a housing recovery, we are mindful of potential short-term, or seasonal, requirements for enhanced liquidity that may arise. Therefore, during September, we entered into a $150 million, three-year amended and restated senior revolving credit facility, further strengthening our available liquidity.

Finally, subsequent to September 30, 2012, we announced the effectiveness of a 1-for-5 reverse split of our common stock. Shares of Beazer Homes' common stock began trading on a split-adjusted basis on October 12, 2012.

Conference Call

The Company will hold a conference call on November 12, 2012 at 11:00 am ET to discuss these results. Interested parties may listen to the conference call and view the Company's slide presentation over the Internet by visiting the "Investor Relations" section of the Company's website at To access the conference call by telephone, listeners should dial 800-619-8639 (for international callers, dial 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 directly access the replay, dial 866-495-9351 or 203-369-1779 and enter the passcode "3740" (available until 11:00 pm ET on November 19, 2012 ), or visit A replay of the webcast will be available at for approximately 30 days.

Beazer Homes USA Inc., headquartered in Atlanta, Georgia, is one of the ten largest single-family homebuilders in the United States.The Company's industry-leading high performance homes are designed to lower the total cost of home ownership while reducing energy and water consumption.With award-winning floor-plans, the Company offers homes that incorporate exceptional value and quality to consumers 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 and trades under the ticker symbol "BZH."

For more information, please visitBeazer.comor check out Beazer onFacebookandTwitter .

Forward Looking Statements

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, declines in employment levels, inflation and increases in the quantity and decrease in the price 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-

(in thousands, except per share data)
Three Months EndedFiscal Year Ended
September 30,September 30,
2012  20112012  2011
Total revenue$370,931$334,908$1,005,677$742,405
Home construction and land sales expenses327,815303,438888,379661,851
Inventory impairments and option contract abandonments1,718 7,128 12,210 32,459 
Gross profit41,39824,342105,08848,095
General and administrative expenses27,67130,234110,051137,376
Depreciation and amortization4,174 3,626 13,510 10,253 
Operating loss(6,510)(24,163)(62,058)(132,245)
Equity in income (loss) of unconsolidated entities329188304560
Loss on extinguishment of debt(42,350)(45,097)(2,909)
Other expense, net(15,777)(15,608)(69,119)(62,224)
Loss from continuing operations before income taxes(64,308)(39,583)(175,970)(196,818)
(Benefit from) provision for income taxes(3,909)2,796 (40,347)3,366 
Loss from continuing operations(60,399)(42,379)(135,623)(200,184)
Loss from discontinued operations, net of tax(5,834)(797)(9,703)(4,675)
Net loss$(66,233)$(43,176)$(145,326)$(204,859)
Weighted average number of shares:
Basic and Diluted23,52814,83018,47414,797
Basic and diluted loss per share:
Continuing Operations$(2.57)$(2.86)$(7.34)$(13.53)
Discontinued operations$(0.25)$(0.05)$(0.53)$(0.31)
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