Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today
announced its financial results for the three and six months ended
March 31, 2015.
The Company reported a net loss from continuing operations of
$2.1 million for the quarter ended March 31, 2015, compared with a
net loss of $8.2 million for the quarter ended March 31, 2014.
New home orders grew 22.2 percent for the quarter with an
average active community count that was 14.3 percent higher than a
year ago. Absorption rates were especially strong at 3.5 sales per
community per month for the quarter, while the average selling
price (“ASP”) from closings increased 12.3 percent to $305.8
thousand, the highest ASP for any quarter in the Company’s history.
Backlog at March 31, 2015 consisted of 2,533 homes with a value of
$814.1 million, up 27.8 percent versus last year.
“We are encouraged by the solid start to the spring selling
season,” said Allan Merrill, CEO of Beazer Homes. “Driven by job
growth, strong affordability and low inventory levels, the selling
environment during our fiscal second quarter reflected an
improvement in homebuyer demand. With our substantially larger
backlog, stable gross margins and fixed cost leverage, we expect to
achieve a $20 million improvement in Adjusted EBITDA for fiscal
2015 versus last year, excluding certain unexpected warranty and
litigation settlement costs.”
Summary results for the three and six months ended
March 31, 2015 are as follows:
Q2 Results from Continuing Operations
(unless otherwise specified)
Quarter Ended March 31, 2015
2014 Change New Home Orders
1,698 1,390 22.2 % Orders per month per community 3.5 3.3 6.1 %
Actual community count at month-end 163 138 18.1 % Average active
community count 160 140 14.3 % Cancellation rates 16.7 % 19.4 % 270
bps Total Home Closings 936 977 (4.2 )% Average sales price
from closings (in thousands) $ 305.8 $ 272.4 12.3 % Homebuilding
revenue (in millions) $ 286.2 $ 266.1 7.6 % Homebuilding gross
profit margin, excluding impairments and abandonments (I&A)
18.3 % 19.7 % -140 bps Homebuilding gross profit margin, excluding
I&A and interest amortized to cost of sales 21.7 % 22.5 % -80
bps Loss from continuing operations before income taxes (in
millions) $ (2.0 ) $ (8.3 ) $ 6.3 Provision of (benefit from)
income taxes (in millions) $ 0.1 $ (0.1 ) $ 0.2 Net loss from
continuing operations (in millions) $ (2.1 ) $ (8.2 ) $ 6.1 Basic
Loss Per Share $ (0.08 ) $ (0.32 ) $ 0.24 Total Company land
and land development spending (in millions) $ 102.1 $ 128.6 $ (26.5
) Total Company Adjusted EBITDA, excluding unexpected warranty
costs and a litigation settlement in discontinued operations (in
millions) $ 19.7 $ 18.5 $ 1.2 LTM Adjusted EBITDA, excluding
unexpected warranty costs and a litigation settlement in
discontinued operations (in millions) $ 129.1 $ 103.5 24.7 %
Six Months Ended March
31, 2015 2014 Change New Home Orders 2,664
2,285 16.6 % LTM orders per month per community 2.8 2.9 (3.4 )%
Cancellation rates 18.5 % 20.4 % 190 bps Total Home Closings
1,821 2,015 (9.6 )% Average sales price from closings (in
thousands) $ 300.8 $ 276.0 9.0 % Homebuilding revenue (in millions)
$ 547.8 $ 556.1 (1.5 )% Homebuilding gross profit margin, excluding
impairments and abandonments (I&A) 16.0 % 19.2 % -320 bps
Homebuilding gross profit margin, excluding I&A and interest
amortized to cost of sales 19.3 % 21.9 % -260 bps Homebuilding
gross profit margin, excluding I&A, interest amortized to cost
of sales and unexpected warranty costs 21.8 % 21.9 % -10 bps
Loss from continuing operations before loss on debt extinguishment
(in millions) $ (20.1 ) $ (12.0 ) $ (8.1 ) Loss on debt
extinguishment (in millions) $ — $ (0.2 ) $ 0.2 Net loss from
continuing operations (in millions) $ (20.1 ) $ (12.2 ) $ (7.9 )
Basic Loss Per Share $ (0.76 ) $ (0.48 ) $ (0.28 ) Land and
land development spending (in millions) $ 247.6 $ 252.4 $ (4.8 )
Total Company Adjusted EBITDA, excluding unexpected warranty costs
and a litigation settlement in discontinued operations (in
millions) $ 36.0 $ 40.2 (10.4 )%
As of March 31, 2015
As of March 31, 2015 2014
Change Backlog 2,533 2,163 17.1 % Dollar value of
backlog at end of period (in millions) $ 814.1 $
637.1 27.8 % ASP in Backlog $ 321.4 $ 294.5 9.1 % Land and lots
controlled 27,794 29,331 (5.2
)
%
Conference Call
The Company will hold a conference call on April 30, 2015 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 866-461-2739 or 203-369-1355 and enter the
passcode “3740” (available until 10:59 pm ET on May 7, 2015), 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 15 states, namely Arizona, California, Delaware, Florida,
Georgia, Indiana, Maryland, Nevada, New Jersey, 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 and the level of quality and
craftsmanship provided by our subcontractors; (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, including these related to
the environment; (xiii) the results of litigation or government
proceedings and fulfillment of the obligations in the consent
orders with governmental authorities and other settlement
agreements; (xiv) the impact of construction defect and home
warranty claims, including water intrusion issues in Florida and
New Jersey; (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 or
other factors; (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 or 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 CONSOLIDATED STATEMENTS OF
INCOME
($ in thousands, except per share
data)
Three Months Ended Six
Months Ended March 31, March 31, 2015
2014
2015 2014 Total revenue
$ 299,359 $ 270,021
$ 565,123 $ 563,191
Home construction and land sales expenses
245,446 216,969
475,992 455,438 Inventory impairments and option contract
abandonments
— 880
— 911
Gross profit
53,913 52,172
89,131 106,842 Commissions
11,969 11,096
22,895 22,917 General and
administrative expenses
32,727 32,628
64,168 61,038
Depreciation and amortization
2,781 2,831
5,122 5,738 Operating income (loss)
6,436 5,617
(3,054 ) 17,149 Equity in income
(loss) of unconsolidated entities
82 (17 )
224 302
Loss on extinguishment of debt
— (153 )
— (153 )
Other expense, net
(8,473 ) (13,727 )
(17,907
) (29,484 ) Loss from continuing operations before income
taxes
(1,955 ) (8,280 )
(20,737 )
(12,186 ) Provision for (benefit from) income taxes
105
(56 )
(591 ) (14 ) Loss from continuing
operations
(2,060 ) (8,224 )
(20,146 )
(12,172 ) Income (loss) from discontinued operations, net of tax
64 253
(4,190 ) (937 ) Net loss
$ (1,996 ) $ (7,971 )
$ (24,336
) $ (13,109 ) Weighted average number of shares: Basic and
Diluted
26,480 25,320
26,469 25,163 Basic and Diluted
(loss) income per share: Continuing Operations
$
(0.08 ) $ (0.32 )
$ (0.76 ) $
(0.48 ) Discontinued Operations
$ — $ 0.01
$
(0.16 ) $ (0.04 ) Total
$ (0.08
) $ (0.31 )
$ (0.92 ) $ (0.52 )
Three Months Ended Six Months
Ended March 31, March 31, 2015
2014
2015 2014 Capitalized
interest in inventory, beginning of period
$ 99,868 $
61,836
$ 87,619 $ 52,562 Interest incurred
30,259 32,458
60,542 64,899 Interest expense not
qualified for capitalization and included as other expense
(7,695 ) (14,659 )
(17,442 ) (30,691 )
Capitalized interest amortized to house construction and land sales
expenses
(9,956 ) (7,379 )
(18,243 )
(14,514 ) Capitalized interest in inventory, end of period
$
112,476 $ 72,256
$ 112,476
$ 72,256
BEAZER HOMES USA, INC.
UNAUDITED CONSOLIDATED BALANCE
SHEETS
($ in thousands, except share and per
share data)
March 31, 2015 September 30, 2014
ASSETS Cash and cash equivalents
$ 146,261 $
324,154 Restricted cash
43,169 62,941 Accounts receivable
(net of allowance of $1,305 and $1,245, respectively)
35,880
34,429 Income tax receivable
46 46 Inventory: Owned
inventory
1,757,036 1,557,496 Land not owned under option
agreements
— 3,857 Total inventory
1,757,036 1,561,353 Investments in marketable securities and
unconsolidated entities
10,372 38,341 Deferred tax assets,
net
46 2,823 Property, plant and equipment, net
21,153 18,673 Other assets
18,290 23,460
Total assets
$ 2,032,253 $ 2,066,220
LIABILITIES AND STOCKHOLDERS’ EQUITY Trade
accounts payable
$ 100,844 $ 106,237 Other
liabilities
137,435 142,516 Obligations related to land not
owned under option agreements
— 2,916 Total debt (net of
discounts of $4,019 and $4,399, respectively)
1,535,172
1,535,433 Total liabilities
$ 1,773,451
$ 1,787,102 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, 27,434,097 issued and
outstanding and 27,173,421 issued and outstanding, respectively)
27 27 Paid-in capital
854,368 851,624 Accumulated
deficit
(595,593 ) (571,257 ) Accumulated other
comprehensive loss
— (1,276 ) Total stockholders’
equity
258,802 279,118 Total liabilities and
stockholders’ equity
$ 2,032,253 $ 2,066,220
Inventory Breakdown Homes under construction
$ 395,726 $ 282,095 Development projects in progress
849,644 786,768 Land held for future development
270,518 301,048 Land held for sale
64,929 51,672
Capitalized interest
112,476 87,619 Model homes
63,743 48,294 Land not owned under option agreements
— 3,857 Total inventory
$
1,757,036 $ 1,561,353
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL
DATA – CONTINUING OPERATIONS
($ in thousands, except otherwise
noted)
Quarter Ended March 31, Six Months Ended
March 31, SELECTED OPERATING DATA 2015
2014
2015 2014 Closings: West region
386 453
702 888 East region
269 257
574
595 Southeast region
281 267
545
532 Total closings
936 977
1,821
2,015 New orders, net of cancellations: West region
715 550
1,120 901 East region
488 424
774 732 Southeast region
495 416
770 652 Total new orders
1,698 1,390
2,664 2,285 Backlog units at end of
period: West region
975 751
975 751 East region
800 798
800 798 Southeast region
758
614
758 614 Total backlog units
2,533
2,163
2,533 2,163 Dollar value
of backlog at end of period (in millions)
$ 814.1
$ 637.1
$ 814.1 $ 637.1
Homebuilding Revenue: West region
$ 108,766 $ 119,044
$ 195,084 $ 239,256 East region
96,758 82,366
198,590 189,245 Southeast region
80,698 64,715
154,130 127,582 Total homebuilding revenue
$ 286,222 $ 266,125
$
547,804 $ 556,083
Quarter
Ended March 31, Six Months Ended March 31,
SUPPLEMENTAL FINANCIAL DATA 2015 2014
2015 2014 Revenues: Homebuilding
$
286,222 $ 266,125
$ 547,804 $ 556,083 Land
sales and other
13,137 3,896
17,319
7,108 Total
$ 299,359 $ 270,021
$ 565,123 $ 563,191 Gross profit:
Homebuilding
$ 52,379 $ 51,655
$ 87,656
$ 106,105 Land sales and other
1,534 517
1,475 737 Total
$ 53,913 $
52,172
$ 89,131 $ 106,842
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.
In addition, given the unusual size and nature of the charges
recorded related to the Florida stucco issues during the six months
ended March 31, 2015, homebuilding gross profit is also shown
excluding these charges. Management believes that this
representation best reflects the operating characteristics of the
company.
Quarter Ended March 31, Six Months
Ended March 31, 2015 2014
2015
2014 Homebuilding gross profit
$ 52,379
18.3 % $ 51,655 19.4 %
$ 87,656 16.0 % $ 106,105
19.1 % Inventory impairments and lot option
abandonments (I&A)
— 880
—
911 Homebuilding gross profit before I&A
52,379
18.3 % 52,535 19.7 %
87,656 16.0
% 107,016 19.2 % Interest amortized to cost of sales
9,782 7,379
17,976 14,514
Homebuilding gross profit before I&A and interest amortized to
cost of sales
62,161 21.7 % 59,914
22.5 %
105,632 19.3 % 121,530
21.9 % Unexpected warranty costs related to Florida stucco
issues — —
13,582 — Homebuilding
gross profit before I&A, interest amortized to cost of sales
and unexpected warranty costs
$ 62,161
21.7 % $ 59,914 22.5 %
$ 119,214
21.8 % $ 121,530 21.9 %
Reconciliation of Adjusted EBITDA (earnings before interest,
taxes, depreciation, amortization, debt extinguishment, impairments
and abandonments) to total company net loss, 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.
In addition, given the unusual size and nature of certain
charges recorded during the periods presented, Adjusted EBITDA is
also shown excluding these charges. Management believes that this
representation best reflects the operating characteristics of the
company.
Quarter EndedMarch 31,
Six Months EndedMarch
31,
LTM EndedMarch 31,
(a)
2015 2014
2015 2014
2015 2014 Net loss
$ (1,996
) $ (7,971 )
$ (24,336 ) $ (13,109 )
$ 23,156 $ (6,949 ) (Benefit from) provision for
income taxes
103 (56 )
(594 ) (4 )
(42,392 ) (3,061 ) Interest amortized to home
construction and land sales expenses, capitalized interest impaired
and interest expense not qualified for capitalization
17,651
22,038
35,685 45,205
82,328 95,625 Depreciation and
amortization and stock compensation amortization
4,322 3,488
8,037 7,004
16,899 15,200 Inventory impairments and
option contract abandonments
— 880
— 911
7,151
1,315 Loss on debt extinguishment
— 153
— 153
19,764 1,151 Joint venture impairment and abandonment
charges
— —
— —
—
181 Adjusted EBITDA
$ 20,080 $ 18,532
$ 18,792 $ 40,160
$ 106,906 $ 103,462
Unexpected warranty costs related to stucco issues in Florida
— —
13,582 —
17,872 — Unexpected warranty
costs related to water intrusion issues in New Jersey
— —
— —
648 — Litigation settlement in discontinued
operations
(340 ) —
3,660 —
3,660 — Adjusted EBITDA excluding
unexpected warranty costs and a litigation settlement in
discontinued operations
$ 19,740 $ 18,532
$ 36,034 $ 40,160
$
129,086 $ 103,462
(a) "LTM" indicates amounts for the trailing 12-months.
Beazer Homes USA, Inc.Robert L. Salomon, 770-829-3700Executive
Vice President and Chief Financial Officerinvestor.relations@beazer.com
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