Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial
results for the quarter and fiscal year ended September 30,
2015.
The Company reported income from continuing operations of $346.6
million for its full year fiscal 2015, including a $324.6 million
tax benefit that reflects the reversal of a substantial portion of
the valuation allowance against its deferred tax assets. Adjusted
EBITDA, excluding unexpected warranty costs and a litigation
settlement in discontinued operations, was $144.1 million for the
year, up $10.9 million from fiscal 2014.
New home orders increased 12.8% for the full year, with an
average active community count that was 13.4% higher than a year
ago. Absorption rates remained strong at 2.8 sales per community
per month for the year, while the Company's average sales price
(“ASP”) increased to $313.5 thousand, the highest ASP for any year
in its history. Finally, the Company's backlog value at
September 30, 2015 was $667.7 million, up nearly 30% from the
prior year, with units up 20.6% and pricing in backlog up 7.3% to
$327.6 thousand.
Additionally, the Company announced that it increased the
capacity of its secured revolving credit facility to $145 million
from $130 million and extended the maturity date to January 15,
2018.
“After returning to profitability last year, 2015 represented a
meaningful step forward in achieving our “2B-10” goals, with growth
in both revenue and Adjusted EBITDA arising from higher community
count, additional closings and an increase in average sales prices.
This was accomplished while maintaining our operating margins, as
the benefit from improving leverage and higher prices offset the
impact from rising costs,” said Allan Merrill, CEO of Beazer
Homes.
“Looking ahead to fiscal 2016 and beyond,” Mr. Merrill
continued, “we expect significant EBITDA growth, as we benefit from
more closings, further increases in average sales prices and
additional fixed cost leverage, enabling us to achieve our “2B-10”
goals in fiscal 2017, in line with our previous guidance. At the
same time, we expect to take steps this year to reduce our
leverage, reflecting our view that doing so in an improving market
will create long-term shareholder value.”
Summary results for the three and twelve months ended September
30, 2015 are as follows:
Q4 Results from
Continuing Operations (unless otherwise specified)
Quarter Ended September
30, 2015 2014
Change New Home Orders
1,170 1,173 (0.3 )%
Orders per month per community
2.4 2.6 (7.7 )% Actual
community count at quarter-end
166 155 7.1 % Average active
community count
164 149 10.1 % Cancellation rates
24.2 % 23.4 % 80 bps Total Home Closings
1,896 1,695 11.9 % Average sales price from closings (in
thousands)
$
322.6
$ 295.4 9.2 % Homebuilding revenue (in millions)
$
611.7 $ 500.6 22.2 % Homebuilding gross margin, excluding
impairments and abandonments (I&A)
17.5 % 18.2 %
-70 bps Homebuilding gross margin, excluding I&A and interest
amortized to cost of sales
21.3 % 21.3 % 0 bps
Homebuilding gross margin, excluding I&A, interest amortized to
cost of sales and unexpected warranty costs
21.3 %
22.3 % -100 bps Income from continuing operations before
income taxes (in millions)
$ 30.7 $ 20.3 $ 10.4
Benefit from income taxes (in millions)
$ 323.8 $
40.0 $ 283.8 Net income from continuing operations (in millions)
$ 354.5 $ 60.3 $ 294.2 Basic Income Per Share
$ 11.42 $ 2.28 $ 9.14
Diluted Income Per Share
$ 11.16 $ 1.90 $ 9.26 Total Company land and
land development spending (in millions)
$ 99.8 $
169.7 $ (69.9 ) Total Company Adjusted EBITDA (in millions)
$ 71.1 $ 56.5 $ 14.6 Total Company Adjusted EBITDA,
excluding unexpected warranty costs (in millions)
$
71.1 $ 61.4 $ 9.7
Fiscal Year
Results from Continuing Operations (unless otherwise
specified)
Year Ended September 30,
2015 2014
Change New Home Orders
5,358 4,748 12.8 % Orders per
month per community
2.8 2.8 — % Cancellation rates
20.1 % 21.3 % -120 bps Total Home Closings
5,010 4,951 1.2 % Average sales price from closings (in
thousands)
$ 313.5 $ 284.8 10.1 % Homebuilding
revenue (in millions)
$ 1,570.6 $ 1,409.9 11.4 %
Homebuilding gross margin, excluding impairments and abandonments
(I&A)
17.1 % 19.1 % -200 bps Homebuilding gross
margin, excluding I&A and interest amortized to cost of sales
20.6 % 21.9 % -130 bps Homebuilding gross margin,
excluding I&A, interest amortized to cost of sales and
unexpected warranty costs
21.5 % 22.2 % -70 bps
Income (loss) from continuing operations before income taxes
(in millions)
$ 22.0 $ (6.9 ) $ 28.9 Benefit from
income taxes (in millions)
$ 324.6 $ 41.8 $ 282.8 Net
income from continuing operations (in millions)
$
346.6 $ 34.9 $ 311.7 Loss on debt extinguishment (in
millions)
$ (0.1 ) $ (19.9 ) $ 19.8 Inventory
impairments and lot option abandonments (in millions)
$
(3.1 ) $ (8.3 ) $ 5.2 Net income from continuing
operations excluding loss on debt extinguishment, inventory
impairments and lot option abandonments (in millions)
$
349.8 $ 63.1 $ 286.7 Basic Income Per Share
$
12.54 $ 1.35 $ 11.19 Diluted Income Per Share
$
10.91 $ 1.10 $ 9.81 Total Company land and land
development spending (in millions)
$ 453.3 $ 551.2 $
(97.9 ) Total Company Adjusted EBITDA (in millions)
$
126.8 $ 128.3 $ (1.5 ) Total Company Adjusted EBITDA,
excluding unexpected warranty costs and a litigation settlement in
discontinued operations (in millions)
$ 144.1 $ 133.2
$ 10.9
As of September
30, 2015 2014
Change Backlog
2,038 1,690 20.6 % Dollar value
of backlog at end of period (in millions)
$ 667.7 $
515.9 29.4 % ASP in backlog (in thousands)
$ 327.6 $
305.3 7.3 % Land and lots controlled
25,720 28,187 (8.8 )%
Conference Call
The Company will hold a conference call on November 10, 2015 at
11:00 a.m. 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 866-448-5643 or 203-369-1188 and
enter the passcode “3740” (available until 11:59 p.m. ET on
November 17, 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 a geographically
diversified homebuilder with active operations in 13 states within
three geographic regions in the United States. The Company's homes
meet or exceed the benchmark for energy efficient home construction
as established by ENERGY STAR® and are designed with Choice
PlansTM 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's active operations are in the following
states: Arizona, California, Delaware, Florida, Georgia, Indiana,
Maryland, Nevada, North Carolina, 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) continuing severe weather conditions or other related
events could result in delays in land development or home
construction, increase our costs or decrease demand in the impacted
areas; (ii) 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; (iii) 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; (iv) the cyclical nature of the
homebuilding industry and a potential deterioration in homebuilding
industry conditions; (v) 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; (vi)
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; (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 reduce our outstanding indebtedness and to comply
with covenants in our debt agreements or satisfy such obligations
through repayment or refinancing; (ix) 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 for tax purposes, or an
increased number of foreclosures; (x) increased competition or
delays in reacting to changing consumer preference in home design;
(xi) 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; (xii) estimates related to the potential recoverability
of our deferred tax assets; (xiii) 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; (xiv) the results of litigation or government
proceedings and fulfillment of the obligations in the consent
orders with governmental authorities and other settlement
agreements; (xv) the impact of construction defect and home
warranty claims, including water intrusion issues in Florida and
New Jersey; (xvi) the cost and availability of insurance and surety
bonds; (xvii) the performance of our unconsolidated entities and
our unconsolidated entity partners; (xviii) the impact of
information technology failures or data security breaches; (xix)
terrorist acts, acts of war or other factors over which the Company
has little or no control; or (xx) the impact on homebuilding in key
markets of governmental regulations limiting the availability of
water.
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.
BEAZER HOMES USA, INC.
CONSOLIDATED STATEMENTS OF
INCOME
(In thousands, except per share
data)
Three Months Ended
Fiscal Year Ended September 30,
September 30, 2015 2014
2015 2014 Total revenue
$
632,852 $ 545,905
$ 1,627,413 $ 1,463,767 Home
construction and land sales expenses
522,787 452,706
1,351,860 1,192,001 Inventory impairments and option
contract abandonments
2,860 5,386
3,109
8,307 Gross profit
107,205 87,813
272,444 263,459 Commissions
24,882 20,789
65,023 58,028 General and administrative expenses
40,659 39,431
142,496 136,463 Depreciation and
amortization
4,719 4,141
13,338
13,279 Operating income
36,945 23,452
51,587
55,689 Equity in income of unconsolidated entities
159 6,324
536 6,545 Loss on extinguishment of debt
(80 )
—
(80 ) (19,917 ) Other expense, net
(6,343
) (9,502 )
(30,013 ) (49,191 ) Income (loss)
from continuing operations before income taxes
30,681 20,274
22,030 (6,874 ) Benefit from income taxes
(323,843
) (40,014 )
(324,569 ) (41,797 ) Income from
continuing operations
354,524 60,288
346,599 34,923
Income (loss) from discontinued operations, net of tax
1,731
(441 )
(2,505 ) (540 ) Net income
$
356,255 $ 59,847
$ 344,094
$ 34,383 Weighted average number of shares: Basic
31,055 26,425
27,628 25,795 Diluted
31,773
31,782
31,772 31,795 Basic income (loss) per share:
Continuing operations
$ 11.42 $ 2.28
$
12.54 $ 1.35 Discontinued operations
$ 0.05 $
(0.02 )
$ (0.09 ) $ (0.02 ) Total
$
11.47 $ 2.26
$ 12.45 $ 1.33 Diluted income
(loss) per share: Continuing operations
$ 11.16 $
1.90
$ 10.91 $ 1.10 Discontinued operations
$
0.05 $ (0.02 )
$ (0.08 ) $ (0.02 )
Total
$ 11.21 $ 1.88
$ 10.83 $ 1.08
Three Months Ended
Fiscal Year Ended September 30,
September 30, 2015 2014
2015 2014 Capitalized interest in
inventory, beginning of period
$ 123,657 $ 84,083
$ 87,619 $ 52,562 Interest incurred
30,465
30,329
121,754 126,906 Capitalized interest impaired
— (245 )
— (245 ) Interest expense not qualified for
capitalization and included as other expense
(6,356 )
(9,672 )
(29,752 ) (50,784 ) Capitalized interest
amortized to house construction and land sales expenses
(24,309 ) (16,876 )
(56,164 ) (40,820 )
Capitalized interest in inventory, end of period
$
123,457 $ 87,619
$ 123,457
$ 87,619
BEAZER HOMES USA, INC.
CONSOLIDATED BALANCE SHEETS
(In thousands, except share and per
share data)
September 30, 2015 September 30,
2014
ASSETS
Cash and cash equivalents
$ 251,583 $ 324,154 Restricted cash
38,901
62,941 Accounts receivable (net of allowance of $1,052 and $1,245,
respectively)
52,379 34,429 Income tax receivable
419
46 Inventory: Owned inventory
1,697,590 1,557,496 Land not
owned under option agreements
— 3,857 Total
inventory
1,697,590 1,561,353 Investments in unconsolidated
entities and marketable securities
13,734 38,341 Deferred
tax assets, net
325,373 2,823 Property and equipment, net
22,230 18,673 Other assets
18,994 23,460
Total assets
$ 2,421,203 $ 2,066,220
LIABILITIES AND STOCKHOLDERS’ EQUITY Trade
accounts payable
$ 113,539 $ 106,237 Other
liabilities
148,966 142,516 Obligations related to land not
owned under option agreements
— 2,916 Total debt (net of
discounts of $3,639 and $4,399, respectively)
1,528,275
1,535,433 Total liabilities
$ 1,790,780
$ 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, 32,660,583 issued and
outstanding and 27,173,421 issued and outstanding, respectively)
33 27 Paid-in capital
857,553 851,624 Accumulated
deficit
(227,163 ) (571,257 ) Accumulated other
comprehensive loss
— (1,276 ) Total stockholders’
equity
630,423 279,118 Total liabilities and
stockholders’ equity
$ 2,421,203 $ 2,066,220
Inventory Breakdown Homes under construction
$
377,281 $ 282,095 Development projects in progress
809,900 786,768 Land held for future development
270,990 301,048 Land held for sale
44,555 51,672
Capitalized interest
123,457 87,619 Model homes
71,407 48,294 Land not owned under option agreements
— 3,857 Total inventory
$
1,697,590 $ 1,561,353
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL
DATA – CONTINUING OPERATIONS
Quarter Ended September
30, Fiscal Year Ended September 30,
SELECTED OPERATING DATA
2015
2014
2015 2014
Closings: West region
779 594
1,954 1,996 East region
560 622
1,546 1,600 Southeast region
557
479
1,510 1,355 Total closings
1,896 1,695
5,010 4,951
New orders, net of cancellations: West region
541 428
2,352 1,815 East region
269 389
1,433 1,539
Southeast region
360
356
1,573 1,394 Total new orders, net
of cancellations
1,170 1,173
5,358
4,748 Backlog units at end of period: West region
955 557
955 557 East region
487 600
487
600 Southeast region
596 533
596
533 Total backlog units at end of period
2,038
1,690
2,038 1,690 Dollar value of
backlog at end of period (in millions)
$ 667.7
$ 515.9
$ 667.7 $ 515.9
Homebuilding Revenue (in thousands): West region
$
245,790 $ 161,118
$ 584,202 $ 537,149 East
region
201,996 209,047
549,484 525,439 Southeast
region
163,888 130,467
436,941
347,292 Total homebuilding revenue
$ 611,674 $
500,632
$ 1,570,627 $ 1,409,880
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL
DATA – CONTINUING OPERATIONS
(In thousands)
Quarter Ended September
30, Fiscal Year Ended September 30,
SUPPLEMENTAL FINANCIAL DATA 2015
2014
2015 2014
Revenues:
Homebuilding
$ 611,674 $ 500,632
$
1,570,627 $ 1,409,880 Land sales and other
21,178
45,273
56,786 53,887 Total
$
632,852 $ 545,905
$ 1,627,413
$ 1,463,767
Gross profit: Homebuilding
$ 105,392 $ 85,969
$ 267,269 $ 260,746
Land sales and other
1,813 1,844
5,175
2,713 Total
$ 107,205 $ 87,813
$ 272,444 $ 263,459
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 certain
unexpected warranty charges during the periods presented,
homebuilding gross profit is also shown excluding these charges.
Management believes that this representation best reflects the
operating characteristics of the Company.
Quarter Ended September
30, Fiscal Year Ended September 30,
2015 2014
2015
2014 Homebuilding gross profit
$ 105,392
17.2 % $ 85,969
17.2 %
$ 267,269
17.0 % $ 260,746 18.5 %
Inventory impairments and lot option abandonments (I&A)
1,676 5,386
1,676 8,307
Homebuilding gross profit before I&A
107,068 17.5
% 91,355 18.2 %
268,945 17.1 % 269,053
19.1 % Interest amortized to cost of sales
23,482
15,311
55,006 39,255 Homebuilding gross
profit before I&A and interest amortized to cost of sales
130,550 21.3 % 106,666 21.3 %
323,951 20.6 % 308,308 21.9 %
Unexpected warranty costs related to Florida stucco issues (net of
expected insurance recoveries)
— 4,290
13,582 4,290
Unexpected warranty costs related to water intrusion issue in New
Jersey
— 648
— 648
Homebuilding gross profit before I&A, interest amortized cost
of sales and unexpected warranty costs
$ 130,550
21.3 % $ 111,604 22.3 %
$
337,533 21.5 % $ 313,246 22.2 %
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 Ended September
30, Fiscal Year Ended September 30,
2015 2014
2015
2014 Net income
$ 356,255 $ 59,847
$
344,094 $ 34,383 Benefit from income taxes
(325,196
) (40,137 )
(325,927 ) (41,802 ) Interest
amortized to home construction and land sales expenses, capitalized
interest impaired, and interest expense not qualified for
capitalization
30,790 26,793
85,986 91,849
Depreciation and amortization and stock compensation amortization
6,307 4,849
19,473 15,866 Inventory impairments and
option contract abandonments
2,860 5,141
3,109 8,062
Loss on debt extinguishment
80 —
80
19,917 Adjusted EBITDA
$ 71,096 $
56,493
$ 126,815 $ 128,275 Unexpected warranty costs
related to Florida stucco issues (net of expected insurance
recoveries)
— 4,290
13,582 4,290 Unexpected warranty
costs related to water intrusion issue in New Jersey
— 648
— 648 Litigation settlement in discontinued operations
— —
3,660 — Adjusted
EBITDA excluding unexpected warranty costs and a litigation
settlement in discontinued operations
$ 71,096
$ 61,431
$ 144,057 $ 133,213
View source
version on businesswire.com: http://www.businesswire.com/news/home/20151110005441/en/
Beazer Homes USA, Inc.David I. Goldberg, 770-829-3700Vice
President of Treasury and Investor Relationsinvestor.relations@beazer.com
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