__________________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
 
 
FORM 8-K
 
 
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest reported event): July 31, 2014
 
BEAZER HOMES USA, INC.
(Exact name of registrant as specified in its charter)
  
 
 
 
 
 
 
DELAWARE
 
001-12822
 
54-2086934
(State or other jurisdiction
of incorporation)
 
(Commission
File Number)
 
(IRS Employer
Identification No.)
1000 Abernathy Road, Suite 260
Atlanta Georgia 30328
(Address of Principal Executive Offices)
(770) 829-3700
(Registrant’s telephone number, including area code)
None
(Former name or former address, if changed since last report)
 
 
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
__________________________________________________________________________________________




Item 2.02.
Results of Operations and Financial Condition
On July 31, 2014, Beazer Homes USA, Inc. issued a press release announcing results of operations for the three and nine months ended June 30, 2014. A copy of the press release is attached hereto as exhibit 99.1.

Item 9.01
Financial Statements and Exhibits
(d) Exhibits
 
99.1
Earnings Press Release dated July 31, 2014




SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
 
 
 
 
 
 
 
 
 
 
 
 
 
 
BEAZER HOMES USA, INC.
 
 
 
 
Date: July 31, 2014
 
 
 
By:
 
/s/ Kenneth F. Khoury
 
 
 
 
 
 
 
 
Kenneth F. Khoury Executive Vice President, Chief Administrative Officer and General Counsel






  
Exhibit 99.1
PRESS RELEASE

Beazer Homes Reports Third Quarter Fiscal 2014 Results Including $6.6 Million Income from Continuing Operations Before Loss on Debt
Extinguishment
•
22.7% Homebuilding Gross Margins
•
Affirms Expectation of Net Income for Fiscal 2014

ATLANTA, July 31, 2014 - Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the quarter and nine months ended June 30, 2014.

“For the third quarter, we recorded strong gross margins, higher average sales prices and a sales absorption rate that was among the highest in our peer group,” said Allan Merrill, CEO of Beazer Homes. “This led to a substantial improvement in Adjusted EBITDA and enabled us to report income from homebuilding operations in our third quarter for the first time in nearly a decade. We believe our improved operational and financial results will allow us to report a full year of profitability for fiscal 2014 and further growth in the years ahead.”

The Company reported $6.6 million in income from continuing operations, excluding a $19.8 million loss on the extinguishment of debt related to the Company’s successful refinancing transaction in April. At that time, the Company refinanced its 9.125% Senior Notes due 2018 with 5.75% Senior Notes due 2019, thereby reducing its annual interest expense obligations by approximately $8 million. Including the debt extinguishment, the Company reported a net loss from continuing operations of $13.2 million for the third quarter.

Subsequent Events
On July 1, 2014, the Company received common stock in American Homes 4 Rent (AMH), a publicly traded real estate investment trust in exchange for its investment in Beazer Pre-Owned Rental Homes, LLC. The Company expects to record a gain on the transaction of approximately $6 million during our fourth quarter of fiscal 2014.

In July 2014, we settled an appeal with the Internal Revenue Service related to prior year tax returns. As a result, the Company expects to receive approximately $26 million in cash during the quarter ended September 30, 2014. This will be recorded as a tax benefit during the Company’s fiscal fourth quarter.






















Summary results for the quarter and nine months ended June 30, 2014 are as follows:

Q3 Results from Continuing Operations (unless otherwise specified)
 
 
Quarter Ended June 30,
 
 
2014
 
2013
 
Change
New Home Orders
 
1,290

 
1,381

 
(6.6
)%
Orders per month per community
 
3.1

 
3.2

 
(3.1
)%
Actual community count at month-end
 
142

 
144

 
(1.4
)%
Average active community count
 
140

 
144

 
(2.8
)%
Cancellation rates
 
21.0
%
 
20.0
%
 
100 bps

 
 
 
 
 
 
 
Total Home Closings
 
1,241

 
1,234

 
0.6
 %
Average sales price from closings (in thousands)
 
$
284.6

 
$
253.8

 
12.1
 %
Homebuilding revenue (in millions)
 
$
353.2

 
$
313.1

 
12.8
 %
Homebuilding gross profit margin, excluding impairments and abandonments (I&A)
 
20.0
%
 
17.1
%
 
290 bps

Homebuilding gross profit margin, excluding I&A and interest amortized to cost of sales
 
22.7
%
 
20.3
%
 
240 bps

 
 
 
 
 
 
 
Income (loss) from continuing operations before loss on debt extinguishment (in millions)
 
$
6.6

 
$
(5.4
)
 
$
12.0

Loss on debt extinguishment (in millions)
 
$
(19.8
)
 
$
—

 
$
(19.8
)
Loss from continuing operations (in millions)
 
$
(13.2
)
 
$
(5.4
)
 
$
(7.8
)
Basic Loss Per Share
 
$
(0.50
)
 
$
(0.22
)
 
$
(0.28
)
 
 
 
 
 
 
 
Land and land development spending (in millions)
 
$
129.1

 
$
161.8

 
$
(32.7
)
Total Company Adjusted EBITDA (in millions)
 
$
31.6

 
$
21.8

 
$
9.8


 
 
Nine Months Ended June 30,
 
 
2014
 
2013
 
Change
New Home Orders
 
3,575

 
3,834

 
(6.8
)%
LTM orders per month per community
 
2.9

 
2.7

 
7.4
 %
Cancellation rates
 
20.6
%
 
21.1
%
 
-50 bps

 
 
 
 
 
 
 
Total Home Closings
 
3,256

 
3,399

 
(4.2
)%
Average sales price from closings (in thousands)
 
$
279.3

 
$
248.0

 
12.6
 %
Homebuilding revenue (in millions)
 
$
909.2

 
$
843.0

 
7.9
 %
Homebuilding gross profit margin, excluding impairments and abandonments (I&A)
 
19.5
%
 
16.0
%
 
350 bps

Homebuilding gross profit margin, excluding I&A and interest amortized to cost of sales
 
22.2
%
 
19.3
%
 
290 bps

 
 
 
 
 
 
 
Loss from continuing operations before loss on debt extinguishment (in millions)
 
$
(5.5
)
 
$
(39.9
)
 
$
34.4

Loss on debt extinguishment (in millions)
 
$
(19.9
)
 
$
(3.6
)
 
$
(16.3
)
Net loss from continuing operations (in millions)
 
$
(25.4
)
 
$
(43.5
)
 
$
18.1

Basic Loss Per Share
 
$
(0.99
)
 
$
(1.77
)
 
$
0.78

 
 


 


 


Land and land development spending (in millions)
 
$
381.5

 
$
314.4

 
$
67.1

Total Company Adjusted EBITDA (in millions)
 
$
71.8

 
$
44.7

 
$
27.1









As of June 30, 2014

•
Total cash and cash equivalents: $264.4 million, including unrestricted cash of approximately $206.5 million
•
Stockholders' equity: $219.0 million
•
Total backlog from continuing operations: 2,212 homes with a sales value of $663.2 million, compared to 2,358 homes with a sales value of $646.1 million as of June 30, 2013
•
Land and lots controlled: 29,783 lots (79.4% owned), an increase of 10.4% from June 30, 2013

Conference Call

The Company will hold a conference call on July 31, 2014 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 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 (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 888-296-6948 or 203-369-3028 and enter the passcode “3740” (available until 10:59 pm ET on August 7, 2014), or visit www.beazer.com.  A replay of the webcast will be available at www.beazer.com for at least 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 Choice Plans 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) the availability and cost of land and the risks associated with the future value of our inventory such as additional asset impairment charges or writedowns; (ii) economic changes nationally or in local markets, including changes in consumer confidence, declines in employment levels, inflation and increases in the quantity and decreases in the price of new homes and resale homes in the market; (iii) the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; (iv) 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; (v) shortages of or increased prices for labor, land or raw materials used in housing production; (vi) 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; (vii) our ability to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing; (viii) a substantial increase in mortgage interest rates, increased disruption in the availability of mortgage financing, a change in tax laws regarding the deductibility of mortgage interest, or an increased number of foreclosures; (ix) increased competition or delays in reacting to changing consumer preference in home design; (x) factors affecting margins such as decreased land values underlying land option agreements, increased land development costs on communities under development or delays or difficulties in implementing initiatives to reduce production and overhead cost structure; (xi) estimates related to the potential recoverability of our deferred tax assets; (xii) potential delays or increased costs in obtaining necessary permits as a result of changes to, or complying with, laws, regulations, or governmental policies and possible penalties for failure to comply with such laws, regulations and governmental policies; (xiii) the results of litigation or government proceedings and fulfillment of the obligations in the Deferred Prosecution Agreement and consent orders with governmental authorities and other settlement agreements; (xiv) the




impact of construction defect and home warranty claims; (xv) the cost and availability of insurance and surety bonds; (xvi) the performance of our unconsolidated entities and our unconsolidated entity partners; (xvii) delays in land development or home construction resulting from adverse weather conditions; (xviii) the impact of information technology failures or data security breaches; (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.



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


-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,
 
2014
 
2013
 
2014
 
2013
Total revenue
$
354,671

 
$
314,439

 
$
917,862

 
$
849,243

Home construction and land sales expenses
283,857

 
260,324

 
739,295

 
712,930

Inventory impairments and option contract abandonments
2,010

 
—

 
2,921

 
2,229

Gross profit
68,804

 
54,115

 
175,646

 
134,084

Commissions
14,322

 
13,078

 
37,239

 
35,406

General and administrative expenses
35,994

 
29,612

 
97,032

 
84,735

Depreciation and amortization
3,400

 
2,953

 
9,138

 
8,761

Operating income
15,088

 
8,472

 
32,237

 
5,182

Equity in (loss) income of unconsolidated entities
(81
)
 
(310
)
 
221

 
(206
)
Loss on extinguishment of debt
(19,764
)
 
—

 
(19,917
)
 
(3,638
)
Other expense, net
(10,205
)
 
(14,036
)
 
(39,689
)
 
(45,858
)
Loss from continuing operations before income taxes
(14,962
)
 
(5,874
)
 
(27,148
)
 
(44,520
)
Benefit from income taxes
(1,769
)
 
(432
)
 
(1,783
)
 
(1,028
)
Loss from continuing operations
(13,193
)
 
(5,442
)
 
(25,365
)
 
(43,492
)
Income (loss) from discontinued operations, net of tax
838

 
(346
)
 
(99
)
 
(2,324
)
Net loss
$
(12,355
)
 
$
(5,788
)
 
$
(25,464
)
 
$
(45,816
)
Weighted average number of shares:
 
 
 
 
 
 
 
Basic and Diluted
26,421

 
24,770

 
25,582

 
24,571

Basic and Diluted (loss) income per share:
 
 
 
 
 
 
 
Continuing Operations
$
(0.50
)
 
$
(0.22
)
 
$
(0.99
)
 
$
(1.77
)
Discontinued Operations
$
0.03

 
$
(0.01
)
 
$
(0.01
)
 
$
(0.09
)
Total
$
(0.47
)
 
$
(0.23
)
 
$
(1.00
)
 
$
(1.86
)

 
 
Three Months Ended
 
Nine Months Ended
 
June 30,
 
June 30,
 
2014
 
2013
 
2014
 
2013
Capitalized interest in inventory, beginning of period
$
72,256

 
$
45,501

 
$
52,562

 
$
38,190

Interest incurred
31,678

 
28,766

 
96,577

 
86,361

Interest expense not qualified for capitalization and included as other expense
(10,421
)
 
(14,252
)
 
(41,112
)
 
(46,709
)
Capitalized interest amortized to house construction and land sales expenses
(9,430
)
 
(9,996
)
 
(23,944
)
 
(27,823
)
Capitalized interest in inventory, end of period
$
84,083

 
$
50,019

 
$
84,083

 
$
50,019






BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands, except share and per share data)
 
 
June 30, 2014
 
September 30, 2013
ASSETS
 
 
 
 
Cash and cash equivalents
 
$
206,482

 
$
504,459

Restricted cash
 
57,963

 
48,978

Accounts receivable (net of allowance of $1,278 and $1,651, respectively)
 
28,999

 
22,342

Income tax receivable
 
4,754

 
2,813

Inventory
 
 
 
 
Owned inventory
 
1,587,954

 
1,304,694

Land not owned under option agreements
 
7,588

 
9,124

Total inventory
 
1,595,542

 
1,313,818

Investments in unconsolidated entities
 
34,224

 
44,997

Deferred tax assets, net
 
5,480

 
5,253

Property, plant and equipment, net
 
17,183

 
17,000

Other assets
 
26,767

 
27,129

Total assets
 
$
1,977,394

 
$
1,986,789

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Trade accounts payable
 
$
84,435

 
$
83,800

Other liabilities
 
133,698

 
145,623

Obligations related to land not owned under option agreements
 
3,016

 
4,633

Total debt (net of discounts of $4,590 and $5,160 respectively)
 
1,537,242

 
1,512,183

Total liabilities
 
$
1,758,391

 
$
1,746,239

 
 
 
 
 
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, 26,768,714 and 25,245,945 issued and outstanding, respectively)
 
27

 
25

Paid-in capital
 
850,080

 
846,165

Accumulated deficit
 
(631,104
)
 
(605,640
)
Total stockholders’ equity
 
219,003

 
240,550

Total liabilities and stockholders’ equity
 
$
1,977,394

 
$
1,986,789

 
 
 
 
 
Inventory Breakdown
 
 
 
 
Homes under construction
 
$
384,795

 
$
262,476

Development projects in progress
 
690,557

 
578,453

Land held for future development
 
309,516

 
341,986

Land held for sale
 
74,365

 
31,331

Capitalized interest
 
84,083

 
52,562

Model homes
 
44,638

 
37,886

Land not owned under option agreements
 
7,588

 
9,124

Total inventory
 
$
1,595,542

 
$
1,313,818




 




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 OPERATING DATA
 
2014
 
2013
 
2014
 
2013
Closings:
 
 
 
 
 
 
 
 
West region
 
514

 
550

 
1,402

 
1,553

East region
 
383

 
370

 
978

 
1,106

Southeast region
 
344

 
314

 
876

 
740

Total closings
 
1,241

 
1,234

 
3,256

 
3,399

 
 
 
 
 
 
 
 
 
New orders, net of cancellations:
 
 
 
 
 
 
 
 
West region
 
486

 
614

 
1,387

 
1,696

East region
 
418

 
389

 
1,150

 
1,140

Southeast region
 
386

 
378

 
1,038

 
998

Total new orders
 
1,290

 
1,381

 
3,575

 
3,834

 
 
 
 
 
 
 
 
 
Backlog units at end of period:
 
 
 
 
 
 
 
 
West region
 
723

 
982

 
723

 
982

East region
 
833

 
781

 
833

 
781

Southeast region
 
656

 
595

 
656

 
595

Total backlog units
 
2,212

 
2,358

 
2,212

 
2,358

 
 
 
 
 
 
 
 
 
Dollar value of backlog at end of period (in millions)
 
$
663.2

 
$
646.1

 
$
663.2

 
$
646.1

 
 
 
 
 
 
 
 
 
Homebuilding Revenue:
 
 
 
 
 
 
 
 
West region
 
$
136,775

 
$
132,803

 
$
376,031

 
$
360,052

East region
 
127,147

 
111,333

 
316,392

 
324,334

Southeast region
 
89,243

 
68,993

 
216,825

 
158,639

Total homebuilding revenue
 
$
353,165

 
$
313,129

 
$
909,248

 
$
843,025



 
 
Quarter Ended June 30,
 
Nine Months Ended June 30,
SUPPLEMENTAL FINANCIAL DATA
 
2014
 
2013
 
2014
 
2013
Revenues:
 
 
 
 
 
 
 
 
Homebuilding
 
$
353,165

 
$
313,129

 
$
909,248

 
$
843,025

Land sales and other
 
1,506

 
1,310

 
8,614

 
6,218

Total
 
$
354,671

 
$
314,439

 
$
917,862

 
$
849,243

 
 
 
 
 
 
 
 
 
Gross profit:
 
 
 
 
 
 
 
 
Homebuilding
 
$
68,672

 
$
53,588

 
$
174,777

 
$
132,471

Land sales and other
 
132

 
527

 
869

 
1,613

Total
 
$
68,804

 
$
54,115

 
$
175,646

 
$
134,084





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.
 
Quarter Ended June 30,
 
Nine Months Ended June 30,
 
2014
 
2013
 
2014
 
2013
Homebuilding gross profit
$
68,672

19.4
%
 
$
53,588

17.1
%
 
$
174,777

19.2
%
 
$
132,471

15.7
%
Inventory impairments and lot option abandonments (I&A)
2,010

 
 
—

 
 
2,921

 
 
2,229

 
Homebuilding gross profit before I&A
70,682

20.0
%
 
53,588

17.1
%
 
177,698

19.5
%
 
134,700

16.0
%
Interest amortized to cost of sales
9,430

 
 
9,996

 
 
23,944

 
 
27,823

 
Homebuilding gross profit before I&A and interest amortized to cost of sales
$
80,112

22.7
%
 
$
63,584

20.3
%
 
$
201,642

22.2
%
 
$
162,523

19.3
%
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,
 
 
2014
 
2013
 
2014
 
2013
Net loss
 
$
(12,355
)
 
$
(5,788
)
 
$
(25,464
)
 
$
(45,816
)
Benefit from income taxes
 
(1,661
)
 
(470
)
 
(1,665
)
 
(1,097
)
Interest amortized to home construction and land sales expenses, capitalized interest impaired, and interest expense not qualified for capitalization
 
19,851

 
24,248

 
65,056

 
74,532

Depreciation and amortization and stock compensation amortization
 
4,013

 
3,590

 
11,017

 
11,036

Inventory impairments and option contract abandonments
 
2,010

 
—

 
2,921

 
2,246

Loss on debt extinguishment
 
19,764

 
—

 
19,917

 
3,638

Joint venture impairment and abandonment charges
 
—

 
181

 
—

 
181

Adjusted EBITDA
 
$
31,622

 
$
21,761

 
$
71,782

 
$
44,720

 







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