BZH Beazer Homes USA Inc New

Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three and six months ended March 31, 2020.

“We generated strong second quarter results, highlighted by growth in revenue, margin and profitability, said Allan P. Merrill, Chairman and Chief Executive Officer of Beazer Homes. “Of course, these results were overshadowed by the effects of the COVID-19 pandemic beginning in mid-March. We have made significant operational changes to help protect the health and safety of our team, our customers and our trade partners and simultaneously taken steps to enhance our liquidity.”

Beazer Homes Fiscal Second Quarter 2020 Highlights and Comparison to Fiscal Second Quarter 2019

• Net income from continuing operations of $10.6 million, compared to net loss from continuing operations of $100.8 million in fiscal second quarter 2019, which included an impairment charge of $147.6 million pre-tax
• Adjusted EBITDA of $43.9 million, up 34.7%
• Homebuilding revenue of $488.0 million, up 15.9% on a 12.6% increase in home closings to 1,277 and a 2.9% increase in average selling price to $382.1 thousand
• Homebuilding gross margin was 16.1%. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 20.8%, up 100 basis points
• SG&A as a percentage of total revenue was 12.0%, down 70 basis points year-over-year
• Unit orders of 1,661, up 3.9% on an increase in average community count to 167 and a slight increase in orders/community/month to 3.3
• Dollar value of backlog of $895.0 million, up 14.3%

The following provides additional details on the Company's performance during the fiscal second quarter 2020:

Profitability. Second quarter net income from continuing operations was $10.6 million, generating diluted earnings per share of $0.35. Net income was up $4.4 million year-over-year after adjusting for impairment charges and gain on debt extinguishment taken during the same period last year. Adjusted EBITDA of $43.9 million was up $11.3 million year-over-year.

Orders. Net new orders for the second quarter increased 3.9% year-over-year, to 1,661. The increase in net new orders was primarily driven by a 2.2% increase in average community count to 167. The cancellation rate for the quarter was 15.8%, up 130 basis points year-over-year.

Homebuilding Revenue. Second quarter closings rose 12.6% to 1,277 homes. Combined with a 2.9% increase in the average selling price to $382.1 thousand, homebuilding revenue was $488.0 million, up 15.9% year-over-year.

Backlog. The dollar value of homes in backlog as of March 31, 2020 increased 14.3% to $895.0 million, or 2,231 homes, compared to $783.3 million, or 1,989 homes, at the same time last year. The average selling price of homes in backlog was $401.2 thousand, up 1.9% year-over-year.

Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 20.8% for the second quarter, up 100 basis points year-over-year.

SG&A Expenses. Selling, general and administrative expenses, as a percentage of total revenue, were 12.0% for the quarter, down 70 basis points year-over-year.

Liquidity Update. At the close of the second quarter, total liquidity was $294.3 million including a fully drawn $250.0 million revolving credit facility. This compares to total liquidity of $221.4 million at March 31, 2019, including cash of $86.4 million and undrawn revolving credit facility capacity of $135.0 million.

As we stated in our April 6th announcement of preliminary operating results, despite an increasingly challenging business environment as a result of the COVID-19 pandemic, especially in the final weeks of March, we generated strong fiscal second quarter results. We also ended the quarter with substantially more liquidity than in the same period in the prior year. However, due to uncertainty surrounding this ongoing public health crisis and its continued impact on the U.S. economy, we cannot predict either the near-term or long-term effects that the pandemic will have on our business. We intend to provide further updates on the current impact of the pandemic on our operations during a conference call on April 30, 2020 at 5:00 p.m. ET to discuss our second fiscal quarter results. Information on the conference call is provided below.

Summary results for the three and six months ended March 31, 2020 are as follows:

 

Three Months Ended March 31,

 

2020

 

2019

 

Change*

New home orders, net of cancellations

1,661

 

 

1,598

 

 

3.9

%

Orders per community per month

3.3

 

 

3.3

 

 

1.7

%

Average active community count

167

 

 

163

 

 

2.2

%

Actual community count at quarter-end

166

 

 

166

 

 

—

%

Cancellation rates

15.8

%

 

14.5

%

 

130 bps

 

 

 

 

 

 

Total home closings

1,277

 

 

1,134

 

 

12.6

%

Average selling price (ASP) from closings (in thousands)

$

382.1

 

 

$

371.2

 

 

2.9

%

Homebuilding revenue (in millions)

$

488.0

 

 

$

420.9

 

 

15.9

%

Homebuilding gross margin

16.1

%

 

(10.5

)%

 

2660 bps

Homebuilding gross margin, excluding impairments and abandonments (I&A)

16.1

%

 

15.4

%

 

70 bps

Homebuilding gross margin, excluding I&A and interest amortized to cost of sales

20.8

%

 

19.8

%

 

100 bps

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes (in millions)

$

14.8

 

 

$

(139.0

)

 

$

153.8

 

Expense (benefit) from income taxes (in millions)

$

4.2

 

 

$

(38.2

)

 

$

42.3

 

Income (loss) from continuing operations (in millions)

$

10.6

 

 

$

(100.8

)

 

$

111.4

 

Basic income (loss) per share from continuing operations

$

0.36

 

 

$

(3.28

)

 

$

3.64

 

Diluted income (loss) per share from continuing operations

$

0.35

 

 

$

(3.28

)

 

$

3.63

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes (in millions)

$

14.8

 

 

$

(139.0

)

 

$

153.8

 

Gain on debt extinguishment (in millions)

$

—

 

 

$

0.2

 

 

$

0.2

 

Inventory impairments and abandonments (in millions)

$

—

 

 

$

(147.6

)

 

$

(147.6

)

Income from continuing operations excluding gain on debt extinguishment and inventory impairments and abandonments before income taxes (in millions)

$

14.8

 

 

$

8.4

 

 

$

6.4

 

Income from continuing operations excluding gain on debt extinguishment and inventory impairments and abandonments after income taxes (in millions)+

$

10.6

 

 

$

6.2

 

 

$

4.4

 

 

 

 

 

 

 

Net income (loss)

$

10.6

 

 

$

(100.9

)

 

$

111.5

 

 

 

 

 

 

 

Land and land development spending (in millions)

$

123.0

 

 

$

139.9

 

 

$

(16.9

)

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

43.9

 

 

$

32.6

 

 

$

11.3

 

LTM Adjusted EBITDA (in millions)

$

194.0

 

 

$

196.2

 

 

$

(2.1

)

*

Change and totals are calculated using unrounded numbers.

+

There were no debt extinguishment and inventory impairments and abandonments for the three months ended March 31, 2020. For the three months ended March 31, 2019, gain on debt extinguishment and inventory impairments and abandonments were tax-effected at the effective tax rate of 27.5%.

"LTM" indicates amounts for the trailing 12 months.

 

Six Months Ended March 31,

 

2020

 

2019

 

Change*

New home orders, net of cancellations

2,912

 

 

2,574

 

 

13.1

%

LTM orders per community per month

2.9

 

 

2.8

 

 

3.6

%

Cancellation rates

15.4

%

 

16.6

%

 

-120 bps

 

 

 

 

 

 

Total home closings

2,389

 

 

2,217

 

 

7.8

%

ASP from closings (in thousands)

$

379.0

 

 

$

370.7

 

 

2.2

%

Homebuilding revenue (in millions)

$

905.4

 

 

$

821.9

 

 

10.2

%

Homebuilding gross margin

15.7

%

 

2.0

%

 

1370 bps

Homebuilding gross margin, excluding impairments and abandonments (I&A)

15.7

%

 

15.4

%

 

30 bps

Homebuilding gross margin, excluding I&A and interest amortized to cost of sales

20.3

%

 

19.8

%

 

50 bps

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes (in millions)

$

17.4

 

 

$

(135.6

)

 

$

153.0

 

Expense (benefit) from income taxes (in millions)

$

4.0

 

 

$

(42.1

)

 

$

46.0

 

Income (loss) from continuing operations (in millions)

$

13.4

 

 

$

(93.5

)

 

$

106.9

 

Basic and diluted income (loss) per share from continuing operations

$

0.45

 

 

$

(2.99

)

 

$

3.44

 

 

 

 

 

 

 

Income (loss) from continuing operations before income taxes (in millions)

$

17.4

 

 

$

(135.6

)

 

$

153.0

 

Gain on debt extinguishment (in millions)

$

—

 

 

$

0.2

 

 

$

(0.2

)

Inventory impairments and abandonments (in millions)

$

—

 

 

$

(148.6

)

 

$

(148.6

)

Income from continuing operations excluding gain on debt extinguishment and inventory impairments and abandonments before income taxes (in millions)

$

17.4

 

 

$

12.8

 

 

$

4.6

 

Income from continuing operations excluding gain on debt extinguishment and inventory impairments and abandonments (in millions)+

$

13.4

 

 

$

14.1

 

 

$

(0.7

)

 

 

 

 

 

 

Net income (loss)

$

13.4

 

 

$

(93.6

)

 

$

106.9

 

 

 

 

 

 

 

Land and land development spending (in millions)

$

269.0

 

 

$

260.9

 

 

$

8.1

 

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

73.3

 

 

$

59.4

 

 

$

13.8

 

*

Change and totals are calculated using unrounded numbers.

+

There were no inventory impairments and abandonments for the six months ended March 31, 2020. For the six months ended March 31, 2019, gain on debt extinguishment and inventory impairments and abandonments were tax-effected at the effective tax rate of 27.5%.

“LTM” indicates amounts for the trailing 12 months.

 

As of March 31,

 

2020

 

2019

 

Change

Backlog units

2,231

 

 

1,989

 

 

12.2

%

Dollar value of backlog (in millions)

$

895.0

 

 

$

783.3

 

 

14.3

%

ASP in backlog (in thousands)

$

401.2

 

 

$

393.8

 

 

1.9

%

Land and lots controlled

19,654

 

 

22,383

 

 

(12.2

)%

Conference Call

The Company will hold a conference call on April 30, 2020 at 5:00 p.m. ET to discuss these results. Interested parties may listen to the conference call and view the Company's slide presentation on the "Investor Relations" page of the Company's website, www.beazer.com. In addition, the conference call will be available by telephone at 800-475-0542 (for international callers, dial 517-308-9429). To be admitted to the call, enter the pass code “8571348.” A replay of the conference call will be available, until 5:00 PM ET on May 10, 2020 at 888-566-0596 (for international callers, dial 203-369-3072) with pass code “3740.”

Headquartered in Atlanta, Beazer Homes (NYSE: BZH) is one of the country’s largest homebuilders. Every Beazer home is designed and built to provide Surprising Performance, giving you more quality and more comfort from the moment you move in - saving you money every month. With Beazer's Choice Plans™, you can personalize your primary living areas - giving you a choice of how you want to live in the home, at no additional cost. And unlike most national homebuilders, we empower our customers to shop and compare loan options. Our Mortgage Choice program gives you the resources to easily compare multiple loan offers and choose the best lender and loan offer for you, saving you thousands over the life of your loan. We build our homes in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia. For more information, visit beazer.com, or check out Beazer on Facebook, Instagram 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 potential negative impact of the COVID-19 pandemic, which, in addition to exacerbating each of the risks listed below, may include a significant decrease in demand for our homes or consumer confidence generally with respect to purchasing a home, an inability to sell and build homes in a typical manner or at all, increased costs or decreased supply of building materials or the availability of subcontractors, housing inspectors, and other third-parties we rely on to support our operations, and recognizing charges in future periods, which may be material, for goodwill impairments, inventory impairments and/or land option contract abandonments; (ii) our ability to raise debt and/or equity capital, due to factors such as limitations in the capital markets (including market volatility) or adverse credit market conditions, which have worsened and may continue to worsen as a result of the COVID-19 pandemic, and our ability to otherwise meet our ongoing liquidity needs (which could cause us to fail to meet the terms of our covenants and other requirements under our various debt instruments and therefore trigger an acceleration of a significant portion or all of our outstanding debt obligations), including the impact of any downgrades of our credit ratings or reduction in our liquidity levels; (iii) market perceptions regarding any capital raising initiatives we may undertake (including future issuances of equity or debt capital); (iv) the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; (v) economic changes nationally or in local markets, changes in consumer confidence, wage levels, declines in employment levels, inflation or increases in the quantity and decreases in the price of new homes and resale homes on the market; (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) the availability and cost of land and the risks associated with the future value of our inventory, such as asset impairment charges we took on select California assets during the second quarter of fiscal 2019; (viii) factors affecting margins, such as decreased land values underlying land option agreements, increased land development costs in communities under development or delays or difficulties in implementing initiatives to reduce our production and overhead cost structure; (ix) estimates related to homes to be delivered in the future (backlog) are imprecise, as they are subject to various cancellation risks that cannot be fully controlled; (x) increases in mortgage interest rates, increased disruption in the availability of mortgage financing, changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes or an increased number of foreclosures; (xi) increased competition or delays in reacting to changing consumer preferences in home design; (xii) natural disasters or other related events that could result in delays in land development or home construction, increase our costs or decrease demand in the impacted areas; (xiii) the potential recoverability of our deferred tax assets; (xiv) 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 or governmental policies, including those related to the environment; (xv) the results of litigation or government proceedings and fulfillment of any related obligations; (xvi) the impact of construction defect and home warranty claims; (xvii) the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred; (xiii) the impact of information technology failures, cybersecurity issues or data security breaches; (xix) terrorist acts, natural disasters, 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, including any statement expressing confidence regarding future outcomes, speaks only as of the date on which such statement is made and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time-to-time, and it is not possible to predict all such factors.

-Tables Follow-

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

Three Months Ended

 

Six Months Ended

 

 

March 31,

 

March 31,

in thousands (except per share data)

 

2020

 

2019

 

2020

 

2019

Total revenue

$

489,413

 

 

$

421,260

 

 

$

907,217

 

 

$

823,300

 

Home construction and land sales expenses

410,568

 

 

356,329

 

 

765,235

 

 

696,707

 

Inventory impairments and abandonments

—

 

 

147,611

 

 

—

 

 

148,618

 

Gross profit (loss)

78,845

 

 

(82,680

)

 

141,982

 

 

(22,025

)

Commissions

18,744

 

 

15,998

 

 

34,809

 

 

31,735

 

General and administrative expenses

40,050

 

 

37,372

 

 

79,749

 

 

76,014

 

Depreciation and amortization

3,627

 

 

2,900

 

 

7,054

 

 

5,670

 

Operating income (loss)

16,424

 

 

(138,950

)

 

20,370

 

 

(135,444

)

Equity in income of unconsolidated entities

147

 

 

81

 

 

134

 

 

17

 

Gain on extinguishment of debt

—

 

 

216

 

 

—

 

 

216

 

Other expense, net

(1,786

)

 

(337

)

 

(3,126

)

 

(379

)

Income (loss) from continuing operations before income taxes

14,785

 

 

(138,990

)

 

17,378

 

 

(135,590

)

Expense (benefit) from income taxes

4,170

 

 

(38,158

)

 

3,959

 

 

(42,080

)

Income (loss) from continuing operations

10,615

 

 

(100,832

)

 

13,419

 

 

(93,510

)

Loss from discontinued operations, net of tax

(1

)

 

(30

)

 

(59

)

 

(41

)

Net income (loss)

$

10,614

 

 

$

(100,862

)

 

$

13,360

 

 

$

(93,551

)

Weighted average number of shares:

 

 

 

 

 

 

 

Basic

29,868

 

 

30,714

 

 

29,808

 

 

31,263

 

Diluted

29,975

 

 

30,714

 

 

30,078

 

 

31,263

 

 

 

 

 

 

 

 

 

Basic income (loss) per share:

 

 

 

 

 

 

 

Continuing operations

$

0.36

 

 

$

(3.28

)

 

$

0.45

 

 

$

(2.99

)

Discontinued operations

—

 

 

—

 

 

—

 

 

—

 

Total

$

0.36

 

 

$

(3.28

)

 

$

0.45

 

 

$

(2.99

)

Diluted income (loss) per share:

 

 

 

 

 

 

 

Continuing operations

$

0.35

 

 

$

(3.28

)

 

$

0.45

 

 

$

(2.99

)

Discontinued operations

—

 

 

—

 

 

—

 

 

—

 

Total

$

0.35

 

 

$

(3.28

)

 

$

0.45

 

 

$

(2.99

)

 

 

Three Months Ended

 

Six Months Ended

 

March 31,

 

March 31,

Capitalized Interest in Inventory

2020

 

2019

 

2020

 

2019

Capitalized interest in inventory, beginning of period

$

137,010

 

 

$

151,886

 

 

$

136,565

 

 

$

144,645

 

Interest incurred

22,271

 

 

25,803

 

 

43,827

 

 

50,724

 

Capitalized interest impaired

—

 

 

(13,792

)

 

—

 

 

(13,907

)

Interest expense not qualified for capitalization and included as other expense

(1,928

)

 

(597

)

 

(3,370

)

 

(839

)

Capitalized interest amortized to home construction and land sales expenses

(22,660

)

 

(18,544

)

 

(42,329

)

 

(35,867

)

Capitalized interest in inventory, end of period

$

134,693

 

 

$

144,756

 

 

$

134,693

 

 

$

144,756

 

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

 

 

 

 

in thousands (except share and per share data)

 

March 31, 2020

 

September 30, 2019

ASSETS

 

 

 

Cash and cash equivalents

$

294,265

 

 

$

106,741

 

Restricted cash

18,282

 

 

16,053

 

Accounts receivable (net of allowance of $309 and $304, respectively)

20,574

 

 

26,395

 

Income tax receivable

9,224

 

 

4,935

 

Owned inventory

1,595,300

 

 

1,504,248

 

Investments in unconsolidated entities

4,040

 

 

3,962

 

Deferred tax assets, net

238,766

 

 

246,957

 

Property and equipment, net

25,820

 

 

27,421

 

Operating lease right-of-use assets

15,109

 

 

—

 

Goodwill

11,376

 

 

11,376

 

Other assets

6,239

 

 

9,556

 

Total assets

$

2,238,995

 

 

$

1,957,644

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Trade accounts payable

$

137,238

 

 

$

131,152

 

Operating lease liabilities

$

17,147

 

 

$

—

 

Other liabilities

108,336

 

 

109,429

 

Total debt (net of debt issuance costs of $11,867 and $12,470, respectively)

1,428,792

 

 

1,178,309

 

Total liabilities

1,691,513

 

 

1,418,890

 

Stockholders’ equity:

 

 

 

Preferred stock (par value $0.01 per share, 5,000,000 shares authorized, no shares issued)

—

 

 

—

 

Common stock (par value $0.001 per share, 63,000,000 shares authorized, 31,020,398 issued and outstanding and 30,933,110 issued and outstanding, respectively)

31

 

 

31

 

Paid-in capital

849,643

 

 

854,275

 

Accumulated deficit

(302,192

)

 

(315,552

)

Total stockholders’ equity

547,482

 

 

538,754

 

Total liabilities and stockholders’ equity

$

2,238,995

 

 

$

1,957,644

 

 

 

 

 

Inventory Breakdown

 

 

 

Homes under construction

$

634,380

 

 

$

507,542

 

Development projects in progress

706,691

 

 

738,201

 

Land held for future development

28,531

 

 

28,531

 

Land held for sale

10,716

 

 

12,662

 

Capitalized interest

134,693

 

 

136,565

 

Model homes

80,289

 

 

80,747

 

Total owned inventory

$

1,595,300

 

 

$

1,504,248

 

BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS

 

 

 

 

 

 

 

Three Months Ended March 31,

 

Six Months Ended March 31,

SELECTED OPERATING DATA

 

2020

 

2019

 

2020

 

2019

Closings:

 

 

 

 

 

 

 

West region

735

 

 

606

 

 

1,429

 

 

1,207

 

East region

235

 

 

213

 

 

427

 

 

401

 

Southeast region

307

 

 

315

 

 

533

 

 

609

 

Total closings

1,277

 

 

1,134

 

 

2,389

 

 

2,217

 

 

 

 

 

 

 

 

 

New orders, net of cancellations:

 

 

 

 

 

 

 

West region

953

 

 

806

 

 

1,690

 

 

1,325

 

East region

351

 

 

334

 

 

584

 

 

535

 

Southeast region

357

 

 

458

 

 

638

 

 

714

 

Total new orders, net

1,661

 

 

1,598

 

 

2,912

 

 

2,574

 

 

 

 

As of March 31,

Backlog units at end of period:

 

2020

 

2019

West region

 

1,243

 

 

976

 

East region

 

498

 

 

415

 

Southeast region

 

490

 

 

598

 

Total backlog units

 

2,231

 

 

1,989

 

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

 

$

895.0

 

 

$

783.3

 

 

in thousands

Three Months Ended March 31,

 

Six Months Ended March 31,

SUPPLEMENTAL FINANCIAL DATA

2020

 

2019

 

2020

 

2019

Homebuilding revenue:

 

 

 

 

 

 

 

West region

$

267,231

 

 

$

210,430

 

 

$

521,629

 

 

$

419,374

 

East region

110,011

 

 

93,751

 

 

187,656

 

 

181,516

 

Southeast region

110,744

 

 

116,764

 

 

196,100

 

 

221,037

 

Total homebuilding revenue

$

487,986

 

 

$

420,945

 

 

$

905,385

 

 

$

821,927

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Homebuilding

$

487,986

 

 

$

420,945

 

 

$

905,385

 

 

$

821,927

 

Land sales and other

1,427

 

 

315

 

 

1,832

 

 

1,373

 

Total revenue

$

489,413

 

 

$

421,260

 

 

$

907,217

 

 

$

823,300

 

 

 

 

 

 

 

 

 

Gross profit (loss):

 

 

 

 

 

 

 

Homebuilding

$

78,744

 

 

$

(44,148

)

 

$

141,852

 

 

$

16,471

 

Land sales and other

101

 

 

(38,532

)

 

130

 

 

(38,496

)

Total gross profit (loss)

$

78,845

 

 

$

(82,680

)

 

$

141,982

 

 

$

(22,025

)

Reconciliation of homebuilding gross profit and the related gross margin before impairments and abandonments and interest amortized to cost of sales to homebuilding gross profit (loss) 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.

 

Three Months Ended March 31,

 

Six Months Ended March 31,

in thousands

2020

 

2019

 

2020

 

2019

Homebuilding gross profit (loss)/margin

$

78,744

 

16.1

%

 

$

(44,148

)

(10.5

)%

 

$

141,852

 

15.7

%

 

$

16,471

 

2.0

%

Inventory impairments and abandonments (I&A)

—

 

 

 

109,023

 

 

 

—

 

 

 

110,030

 

 

Homebuilding gross profit/margin before I&A

78,744

 

16.1

%

 

64,875

 

15.4

%

 

141,852

 

15.7

%

 

126,501

 

15.4

%

Interest amortized to cost of sales

22,660

 

 

 

18,544

 

 

 

42,329

 

 

 

35,867

 

 

Homebuilding gross profit/margin before I&A and interest amortized to cost of sales

$

101,404

 

20.8

%

 

$

83,419

 

19.8

%

 

$

184,181

 

20.3

%

 

$

162,368

 

19.8

%

Reconciliation of Adjusted EBITDA to total company net income (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. These EBITDA measures should not be considered alternatives to net income (loss) determined in accordance with GAAP as an indicator of operating performance.

The reconciliation of Adjusted EBITDA to total company net income (loss) below differs from prior year, as it reclassifies stock-based compensation expense from an adjustment within EBITDA to an adjustment within Adjusted EBITDA in order to accurately present EBITDA per its definition.

 

Three Months Ended March 31,

 

Six Months Ended March 31,

 

LTM Ended

in thousands

2020

 

2019

 

2020

 

2019

 

2020

 

2019

Net income (loss)

$

10,614

 

 

$

(100,862

)

 

$

13,360

 

 

$

(93,551

)

 

$

27,391

 

 

$

(19,537

)

Expense (benefit) from income taxes

4,170

 

 

(38,168

)

 

3,942

 

 

(42,092

)

 

8,789

 

 

(56,691

)

Interest amortized to home construction and land sales expenses and capitalized interest impaired

22,660

 

 

32,336

 

 

42,329

 

 

49,774

 

 

101,496

 

 

106,756

 

Interest expense not qualified for capitalization

1,928

 

 

597

 

 

3,370

 

 

839

 

 

5,640

 

 

1,079

 

EBIT

39,372

 

 

(106,097

)

 

63,001

 

 

(85,030

)

 

143,316

 

 

31,607

 

Depreciation and amortization

3,627

 

 

2,900

 

 

7,054

 

 

5,670

 

 

16,143

 

 

13,904

 

EBITDA

42,999

 

 

(103,197

)

 

70,055

 

 

(79,360

)

 

159,459

 

 

45,511

 

Stock-based compensation expense

899

 

 

2,180

 

 

3,210

 

 

4,294

 

 

9,442

 

 

9,344

 

(Gain) loss on extinguishment of debt

—

 

 

(216

)

 

—

 

 

(216

)

 

25,136

 

 

1,719

 

Inventory impairments and abandonments (b)

—

 

 

133,819

 

 

—

 

 

134,711

 

 

—

 

 

139,249

 

Joint venture impairment and abandonment charges

—

 

 

—

 

 

—

 

 

—

 

 

—

 

 

341

 

Adjusted EBITDA

$

43,898

 

 

$

32,586

 

 

$

73,265

 

 

$

59,429

 

 

$

194,037

 

 

$

196,164

 

(a)

 

“LTM” indicates amounts for the trailing 12 months.

(b)

 

In periods during which we impaired certain of our inventory assets, capitalized interest that is impaired is included in the line above titled “Interest amortized to home construction and land sales expenses and capitalized interest impaired.”

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20200430005804/en/

David I. Goldberg Vice President of Treasury and Investor Relations 770-829-3700 investor.relations@beazer.com