Beazer Homes Announces Earnings Per Share of $1.15 For Quarter Ended June 30, 1999; Up 80% Over Prior Year
ATLANTA, July 28 /PRNewswire/ -- Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com ) today announced results for the quarter ended June 30, 1999, the third quarter of its 1999 fiscal year. Highlights of the quarter, compared to the same quarter of the prior year, are as follows:
* Diluted EPS: $1.15 (up 80% vs. $.64 in prior year) * Home closings: 1,961 (up 31%) * Total revenues: $370 million (up 58%) * Earnings before interest, taxes, depreciation and amortization (EBITDA) $24.5 million (up 66%) * Pretax margin 4.5% (up 60 basis points) * Net income: $10.3 million (up 82%) * New orders: 2,134 (up 8%) * Record dollar backlog: $613 million (up 40%)
Earnings Increase Reflect Continuing Improvement in Margins
Ian McCarthy, President and Chief Executive Officer of Beazer Homes, said, "We are pleased to report, for the sixth consecutive quarter, an increase in earnings that is higher than the increase in our home closings. During the quarter ended June 30, 1999 our earnings per share increased by 80%, to $1.15 a share, on a 31% increase in home closings. This increase was driven by a 60 basis point improvement in our pretax margin. As we have discussed in past quarters, we believe that this improvement reflects principally the success of our profitability improvement initiatives, as well as a very strong homebuilding environment."
Positive Order Trend Accelerating
The Company also reported that it had 2,134 new orders for the quarter ended June 30, 1999, an 8% increase over the year earlier June quarter. The Company's backlog of homes sold but not yet closed at June 30, 1999 was 3,295 homes (up 21%) with a sales value of $613 million (up 40%), both Company records.
Mr. McCarthy commented, "The 8% increase in our new orders during the June quarter is double the 4% increase that we reported in the March quarter. This acceleration in our new order trend results both from the continued healthy homebuilding environment and the success of our individual subdivisions. We expect this acceleration to continue in the September quarter, as a result of both the continuing strong market and an easier comparison in the September 1998 quarter than in the June 1998 quarter. New orders in the September 1998 quarter were up only 11% compared to a 24% increase in the June 1998 quarter."
Beazer Strengthens Its Presence On the Internet
On June 22, 1999, Beazer Homes announced an agreement with NewHomeNetwork.com, the most trafficked national new home web site, to add all of its 250 communities to the site. Commencing in August 1999, Beazer's communities and homes will be featured with detailed descriptions and enhanced visual information, including virtual tours (featuring 360-degree interior and exterior images) and links to Beazer's own web site beazer.com.
Mr. McCarthy said, "We are extremely pleased to be the first national homebuilder to form an alliance with NewHomeNetwork.com, the number one destination for new home shoppers on the internet. Our affiliation with NewHomeNetwork.com is just part of our commitment to the internet. Our own web site at www.beazer.com, is already one of the top-rated homebuilder internet sites and we will soon announce significant upgrades to our site."
Mr. McCarthy continued, "We recognize that the internet is fundamentally changing the ways we can reach out to and communicate with homebuyers. Beazer Homes intends beazer.com to be at the forefront of this rapid evolution and the destination of choice for the new home internet shopper."
Completion of Conversion of Preferred Stock
During the quarter ended June 30, 1999, the Company completed the redemption and conversion of its preferred stock. Holders of 99.9% of the original two million shares of preferred stock had converted their shares to common stock, with only 2,164 shares being redeemed for cash.
David Weiss, Executive Vice President and Chief Financial Officer of Beazer Homes, said, "We are extremely pleased that the holders of substantially all of our preferred stock have converted their shares to common stock. This conversion removes an overhang on our common stock, simplifies our capital structure and eliminates a $4 million annual cash dividend."
Mr. Weiss added, "We end our third fiscal quarter in a very strong financial position, with only $62 million drawn on our $200 million revolving credit facility and our debt to total capitalization ratio at 56%, down from $75 million and 58%, respectively, at March 31, 1999. We expect that borrowings at September 30, the end of our fiscal year, will be reduced further and that our debt to total capitalization will approximate 50%."
Plan For The Next Five Years
Mr. McCarthy said, "Earlier this year we introduced our plan "Beazer Homes: The Next Five Years." As part of this plan we projected that we would earn $4.00 in fiscal 1999, the beginning point of our five year plan. We also disclosed that our target was to more than double EPS to $9.00 per share over the next five years. With the strong increase in earnings in our June quarter, we now believe that we can beat our original estimate for fiscal 1999. Further, our improving profitability, strong backlog and accelerating new order trend give us confidence in a further increase in fiscal 2000. The homebuilding market remains strong, we continue to enhance our performance and we have the financial resources and flexibility to continue to take advantage of opportunities."
Beazer Homes USA, Inc., based in Atlanta, Georgia, is one of the country's ten largest single family homebuilders, with operations in Arizona, California, Florida, Georgia, Maryland, Nevada, New Jersey, North Carolina, South Carolina, Tennessee, Texas and Virginia.
Note: Certain statements in this Press Release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such risks, uncertainties and other factors include, but are not limited to, changes in general economic conditions, fluctuations in interest rates, increases in raw materials and labor costs, levels of competition and other factors described in the Company's Annual Report for the year ended September 30, 1998.
BEAZER HOMES USA, INC. CONSOLIDATED OPERATING AND FINANCIAL DATA (Dollars in thousands, except per share amounts) Financial Data: Quarter Ended Nine Months Ended June 30, June 30, 1999 1998 1999 1998 INCOME STATEMENT Revenues $370,431 $234,811 $939,885 $611,760 Costs and expenses: Home construction and land sales 306,424 194,380 779,632 510,173 Interest 6,472 4,914 17,769 12,232 Selling, general and administrative expense 40,571 26,703 104,689 71,597 Operating income 16,964 8,814 37,796 17,758 Other income (expense) (294) 252 (364) 453 Income before income taxes 16,670 9,066 37,432 18,211 Income taxes 6,418 3,445 14,410 6,965 Net income $10,252 $5,621 $23,022 $11,246 Dividends and other payments to preferred shareholders $36 $1,000 $3,343 $3,000 Net income to common shareholders: Basic $10,216 $4,621 $19,679 $8,246 Diluted $10,252 $5,621 $23,022 $11,246 Net income per share: Basic $1.23 $0.79 $2.85 $1.41 Diluted $1.15 $0.64 $2.58 $1.29 Weighted average shares outstanding, in thousands: Basic 8,285 5,886 6,908 5,857 Diluted 8,919 8,772 8,922 8,737 Interest incurred $6,962 $5,525 $19,981 $15,440 Depreciation and amortization $1,388 $774 $3,449 $2,118 SELECTED BALANCE SHEET DATA June 30, 1999 Cash $--- Inventory 563,059 Total assets 622,594 Total debt 277,000 Stockholders' equity 219,766 BEAZER HOMES USA, INC. CONSOLIDATED OPERATING AND FINANCIAL DATA (Continued) (Dollars in thousands) Operating Data: Quarter Ended Nine Months Ended June 30, June 30, SELECTED OPERATING DATA 1999 1998 1999 1998 Closings: Southeast region 796 608 2,039 1,584 Southwest region 734 750 2,054 1,882 Central region 163 139 427 442 Mid-Atlantic region 268 --- 638 --- Total closings 1,961 1,497 5,158 3,908 New orders, net of cancellations (A): Southeast region 880 767 2,435 2,125 Southwest region 778 971 2,254 2,602 Central region 147 245 355 619 Mid-Atlantic region 329 --- 797 --- Total new orders 2,134 1,983 5,841 5,346 Backlog at end of period 3,295 2,726 Dollar value of backlog at end of period $612,552 $438,996 Active subdivisions: Southeast region 112 119 Southwest region 68 62 Central region 28 33 Mid-Atlantic region 42 --- Total active subdivisions 250 214 Quarter Ended Nine Months Ended June 30, June 30, SUPPLEMENTAL FINANCIAL 1999 1998 1999 1998 DATA: Revenues Home sales $365,481 $231,654 $930,158 $598,756 Land and lot sales 3,553 1,961 4,555 10,524 Mortgage origination revenue 3,467 2,168 10,192 4,883 Intercompany elimination - mortgage (2,070) (972) (5,020) (2,403) Total revenues $370,431 $234,811 $939,885 $611,760 Cost of home construction and land sales Home sales $305,521 $193,427 $780,874 $502,431 Land and lot sales 2,973 1,925 3,778 10,145 Intercompany elimination - mortgage (2,070) (972) (5,020) (2,403) Total costs of home construction and land sales $306,424 $194,380 $779,632 $510,173 Selling, general and administrative Homebuilding operations $38,437 $25,562 $98,728 $68,928 Mortgage origination operations 2,134 1,141 5,961 2,669 Total selling, general and administrative $40,571 $26,703 $104,689 $71,597 (A) New orders for the nine months ended June 30, 1999 and 1998 do not include 555 and 96, respectively, homes in backlog acquired in business acquisitions. SOURCE Beazer Homes USA, Inc.