Beazer Homes Reports Improved Third Quarter Results Highlighted by Higher Margins and Faster Sales P
Beazer Homes Reports Improved Third Quarter Results Highlighted by Higher Margins and Faster Sales Pace
ATLANTA--(BUSINESS WIRE)-- Beazer Homes USA, Inc. (NYS: 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 thousands) | $ | 253.8 | $ | 227.3 | 11.7 | % | ||||||||
Homebuilding revenue (in millions) | $ | 313.1 | $ | 252.1 | 24.2 | % | ||||||||
Homebuilding gross profit margin, excluding impairments and abandonments (I&A) | 17.1 | % | 10.5 | % | 660 bps | |||||||||
Homebuilding gross profit margin, excluding I&A and interest amortized to cost of sales | 20.3 | % | 16.7 | % | 360 bps | |||||||||
Loss from continuing operations before income taxes (in millions) | $ | (5.9 | ) | $ | (37.9 | ) | $ | 32.0 | ||||||
Benefit from (provision for) income taxes (in millions) | $ | 0.4 | $ | (0.1 | ) | $ | 0.5 | |||||||
Net loss from continuing operations (in millions) | $ | (5.4 | ) | $ | (38.0 | ) | $ | 32.6 | ||||||
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 millions) | $ | (5.4 | ) | $ | (32.2 | ) | $ | 26.8 | ||||||
Land and land development spending (in millions) | $ | 161.8 | $ | 40.5 | $ | 121.3 | ||||||||
Total Company Adjusted EBITDA (in millions) | $ | 21.8 | $ | 4.0 | $ | 17.8 | ||||||||
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 thousands) | $ | 248.0 | $ | 222.9 | 11.3 | % | ||||||||
Homebuilding revenue (in millions) | $ | 843.0 | $ | 628.5 | 34.1 | % | ||||||||
Homebuilding gross profit margin, excluding impairments and abandonments (I&A) (a) | 16.0 | % | 11.4 | % | 460 bps | |||||||||
Homebuilding gross profit margin, excluding I&A and interest amortized to cost of sales (a) | 19.3 | % | 18.0 | % | 130 bps | |||||||||
Loss from continuing operations before income taxes (in millions) | $ | (44.5 | ) | $ | (111.7 | ) | $ | 67.2 | ||||||
Benefit from income taxes (in millions) | $ | 1.0 | $ | 36.4 | $ | (35.4 | ) | |||||||
Net loss from continuing operations (in millions) | $ | (43.5 | ) | $ | (75.3 | ) | $ | 31.8 | ||||||
Basic Loss Per Share | $ | (1.77 | ) | $ | (4.48 | ) | $ | 2.71 | ||||||
Loss on debt extinguishment (in millions) | $ | (3.6 | ) | $ | (2.7 | ) | $ | (0.9 | ) | |||||
Inventory impairments (in millions) | $ | (2.2 | ) | $ | (10.5 | ) | $ | 8.3 | ||||||
Net loss from continuing operations excluding inventory impairments and loss on debt extinguishment (in millions) | $ | (37.7 | ) | $ | (62.1 | ) | $ | 24.4 | ||||||
Land and land development spending (in millions) | $ | 314.4 | $ | 140.6 | $ | 173.8 | ||||||||
Total Company Adjusted EBITDA (in millions) | $ | 44.7 | $ | 6.8 | $ | 37.9 | ||||||||
(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 expenses | 260,324 | 227,505 | 712,930 | 560,564 | ||||||||||||||
Inventory impairments and option contract abandonments | — | 5,819 | 2,229 | 10,492 | ||||||||||||||
Gross profit | 54,115 | 21,231 | 134,084 | 63,690 | ||||||||||||||
Commissions | 13,078 | 10,776 | 35,406 | 27,522 | ||||||||||||||
General and administrative expenses | 29,612 | 27,867 | 84,735 | 82,380 | ||||||||||||||
Depreciation and amortization | 2,953 | 3,743 | 8,761 | 9,336 | ||||||||||||||
Operating income (loss) | 8,472 | (21,155 | ) | 5,182 | (55,548 | ) | ||||||||||||
Equity in (loss) income of unconsolidated entities | (310 | ) | 48 | (206 | ) | (25 | ) | |||||||||||
Loss on extinguishment of debt | — | — | (3,638 | ) | (2,747 | ) | ||||||||||||
Other expense, net | (14,036 | ) | (16,804 | ) | (45,858 | ) | (53,342 | ) | ||||||||||
Loss from continuing operations before income taxes | (5,874 | ) | (37,911 | ) | (44,520 | ) | (111,662 | ) | ||||||||||
(Benefit from) provision for income taxes | (432 | ) | 145 | (1,028 | ) | (36,438 | ) | |||||||||||
Loss from continuing operations | (5,442 | ) | (38,056 | ) | (43,492 | ) | (75,224 | ) | ||||||||||
Loss from discontinued operations, net of tax | (346 | ) | (1,828 | ) | (2,324 | ) | (3,869 | ) | ||||||||||
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 Operations | $ | (0.22 | ) | $ | (1.92 | ) | $ | (1.77 | ) | $ | (4.48 | ) | ||||||
Discontinued Operations | $ | (0.01 | ) | $ | (0.09 | ) | $ | (0.09 | ) | $ | (0.23 | ) | ||||||
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, beginning of period | ||||||||||||||||||
