Beazer Homes Reports First Quarter Fiscal 2012 Results
“I am pleased with our results for the quarter,” said
Summary results of the quarter are as follows:
As of
-
Total cash and cash equivalents:
$550 million , including unrestricted cash of approximately$273 million -
Stockholders’ equity:
$200 million , not including$57.5 million of mandatory convertible subordinated notes, which automatically convert to common stock at maturity in 2013 -
Total backlog from continuing operations: 1,307 homes with a sales
value of
$315.8 million , compared to 787 homes with a sales value of$198.0 million as ofDecember 31, 2010 -
Land and lots controlled: 25,998 lots (84% owned), a decrease of 3%
from
December 31, 2010
Quarter Ended
-
Total new orders: 724 homes, a 36% increase from fiscal 2011
- Cancellation rates: 35.1%, compared with 31.4% in fiscal 2011
- Total home closings: 867 homes, a 67% increase from fiscal 2011
-
Revenue:
$188.5 million , compared to$109.0 million in fiscal 2011-
Average sales price from closings:
$215,500 , compared with$209,300 in fiscal 2011
-
Average sales price from closings:
-
Gross profit margin: 11.8%, compared to 10.3% in fiscal 2011. These
margins were impacted by
$3.5 million and$0.6 million in fiscal 2012 and fiscal 2011, respectively, for impairments and option contract abandonments. In addition, these margins were impacted by an$11.0 million warranty recovery in fiscal 2012 and a$1.4 million warranty recovery in fiscal 2011.- Homebuilding gross profit margin, excluding impairments and abandonments: 13.3%, compared to 10.7% in fiscal 2011
- Homebuilding gross profit margin, excluding impairments, abandonments and interest amortized to cost of sales: 20.2%, compared to 17.0% in fiscal 2011. Excluding the warranty-related items mentioned above, these margins would have been: 14.3%, compared to 15.8% in fiscal 2011
-
Net income from continuing operations:
$0.7 million , or diluted earnings per share of$0.01 , including non-cash pre-tax charges of$3.5 million for inventory impairments and a benefit from income taxes of$35.7 million . This compared to a loss from continuing operations in the first quarter of fiscal 2011 of$48.3 million , or$0.65 per share, which included non-cash pre-tax charges of$0.6 million for inventory impairments. -
Net income:
$739,000 (including net income from discontinued operations of$41,000 ), compared with a net loss of$48.8 million for fiscal 2011 (including a loss from discontinued operations of$0.5 million .) -
Total Company land and land development spending:$58.2 million , compared with$62.6 million in fiscal 2011
Conference Call
The Company will hold a conference call on
Forward Looking Statements
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 final outcome of
various putative class action lawsuits, multi-party suits and similar
proceedings as well as the results of any other litigation or government
proceedings and fulfillment of the obligations in the Deferred
Prosecution Agreement and consent orders with governmental authorities
and other settlement agreements; (ii) additional asset impairment
charges or writedowns; (iii) economic changes nationally or in local
markets, including changes in consumer confidence, declines in
employment levels, volatility of mortgage interest rates and inflation;
(iv) the effect of changes in lending guidelines and regulations and the
uncertain availability of mortgage financing; (v) a slower economic
rebound than anticipated, coupled with persistently high unemployment
and additional foreclosures; (vi) continued or increased downturn in the
homebuilding industry; (vii) 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, (viii) 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; (ix) potential
inability to comply with covenants in our debt agreements or satisfy
such obligations through repayment or refinancing; (x) increased
competition or delays in reacting to changing consumer preference in
home design; (xi) shortages of or increased prices for labor, land or
raw materials used in housing production; (xii) factors affecting
margins such as decreased land values underlying lot option agreements,
increased land development costs on communities under development or
delays or difficulties in implementing initiatives to reduce production
and overhead cost structure; (xiii) the performance of our joint
ventures and our joint venture partners; (xiv) the impact of
construction defect and home warranty claims including those related to
possible installation of drywall imported from
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 CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS | ||||||||
(in thousands, except per share data) | ||||||||
Three Months Ended | ||||||||
December 31, | ||||||||
2011 | 2010 | |||||||
Total revenue | $ | 188,548 | $ | 108,952 | ||||
Home construction and land sales expenses | 162,776 | 97,051 | ||||||
Inventory impairments and option contract abandonments | 3,503 | 639 | ||||||
Gross profit | 22,269 | 11,262 | ||||||
Commissions | 8,371 | 4,990 | ||||||
General and administrative expenses | 28,194 | 32,503 | ||||||
Depreciation and amortization | 2,403 | 1,905 | ||||||
Operating loss | (16,699 | ) | (28,136 | ) | ||||
Equity in (loss) income of unconsolidated joint ventures | (77 | ) | 238 | |||||
Loss on extinguishment of debt | - | (2,902 | ) | |||||
Other expense, net | (18,273 | ) | (18,065 | ) | ||||
Loss from continuing operations before income taxes | (35,049 | ) | (48,865 | ) | ||||
Benefit from income taxes | (35,747 | ) | (593 | ) | ||||
Income (loss) from continuing operations | 698 | (48,272 | ) | |||||
Income (loss) from discontinued operations, net of tax | 41 | (536 | ) | |||||
Net income (loss) | $ | 739 | $ | (48,808 | ) | |||
Weighted average number of shares: | ||||||||
Basic | 74,165 | 73,878 | ||||||
Diluted | 87,106 | 73,878 | ||||||
Earning (loss) per share: | ||||||||
Basic earning (loss) per share from continuing operations | $ | 0.01 | $ | (0.65 | ) | |||
Basic earnings (loss) per share from discontinued operations | $ | - | $ | (0.01 | ) | |||
Basic earnings (loss) per share | $ | 0.01 | $ | (0.66 | ) | |||
Diluted earning (loss) per share from continuing operations | $ | 0.01 | $ | (0.65 | ) | |||
Diluted earnings (loss) per share from discontinued operations | $ | - | $ | (0.01 | ) | |||
Diluted earnings (loss) per share | $ | 0.01 | $ | (0.66 | ) | |||
Interest Data: | Three Months Ended | |||||||
December 31, | ||||||||
2011 | 2010 | |||||||
Capitalized interest in inventory, beginning of period | $ | 45,973 | $ | 36,884 | ||||
Interest Incurred | 32,525 | 32,366 | ||||||
Capitalized interest impaired | (28 | ) | - | |||||
Interest expense not qualified for capitalization and | ||||||||
included as other expense | (19,117 | ) | (18,923 | ) | ||||
Capitalized interest amortized to house construction and | ||||||||
land sales expenses | (12,843 | ) | (6,894 | ) | ||||
Capitalized interest in inventory, end of period | $ | 46,510 | $ | 43,433 | ||||
BEAZER HOMES USA, INC. | |||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | |||||||
(in thousands, except share and per share data) | |||||||
December 31, | September 30, | ||||||
2011 | 2011 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 272,524 | $ | 370,403 | |||
Restricted cash | 277,241 | 277,058 | |||||
Accounts receivable (net of allowance of $3,875 and $3,872, respectively) | 27,967 | 28,303 | |||||
Income tax receivable | 3,081 | 4,823 | |||||
Inventory | |||||||
Owned inventory | 1,178,237 | 1,192,380 | |||||
Land not owned under option agreements | 14,625 | 11,753 | |||||
Total inventory | 1,192,862 | 1,204,133 | |||||
Investments in unconsolidated joint ventures | 21,489 | 9,467 | |||||
Deferred tax assets, net | 5,932 | 2,760 | |||||
Property, plant and equipment, net | 22,589 | 22,613 | |||||
Previously owned rental homes, net | 17,604 | 11,347 | |||||
Other assets | 32,568 | 46,570 | |||||
Total assets | $ | 1,873,857 | $ | 1,977,477 | |||
LIABILITIES AND STOCKHOLDERS' EQUITY | |||||||
Trade accounts payable | $ | 46,395 | $ | 72,695 | |||
Other liabilities | 131,420 | 212,187 | |||||
Obligations related to land not owned under option agreements | 6,874 | 5,389 | |||||
Total debt (net of discounts of $22,278 and $23,243, respectively) | 1,488,785 | 1,488,826 | |||||
Total liabilities | 1,673,474 | 1,779,097 | |||||
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, 180,000,000 shares | |||||||
authorized, 76,406,697 and 75,588,396 issued and outstanding, | |||||||
respectively) | 76 | 76 | |||||
Paid-in capital | 626,014 | 624,750 | |||||
Accumulated deficit | (425,707 | ) | (426,446 | ) | |||
Total stockholders' equity | 200,383 | 198,380 | |||||
Total liabilities and stockholders' equity | $ | 1,873,857 | $ | 1,977,477 | |||
Inventory Breakdown | |||||||
Homes under construction | $ | 253,904 | $ | 277,331 | |||
Development projects in progress | 433,306 | 424,055 | |||||
Land held for future development | 384,938 | 384,761 | |||||
Land held for sale | 12,054 | 12,837 | |||||
Capitalized interest | 46,510 | 45,973 | |||||
Model homes | 47,525 | 47,423 | |||||
Land not owned under option agreements | 14,625 | 11,753 | |||||
Total inventory | $ | 1,192,862 | $ | 1,204,133 | |||
BEAZER HOMES USA, INC. | ||||||
CONSOLIDATED OPERATING AND FINANCIAL DATA - CONTINUING OPERATIONS | ||||||
Quarter Ended | ||||||
December 31, | ||||||
SELECTED OPERATING DATA | 2011 | 2010 | ||||
Closings: | ||||||
West region | 370 | 216 | ||||
East region | 310 | 202 | ||||
Southeast region | 187 | 101 | ||||
Continuing Operations | 867 | 519 | ||||
Discontinued Operations | 15 | 30 | ||||
Total closings | 882 | 549 | ||||
New orders, net of cancellations: | ||||||
West region | 303 | 174 | ||||
East region | 249 | 257 | ||||
Southeast region | 172 | 103 | ||||
Continuing Operations | 724 | 534 | ||||
Discontinued Operations | - | 19 | ||||
Total new orders | 724 | 553 | ||||
Backlog units at end of period: | ||||||
West region | 503 | 227 | ||||
East region | 577 | 421 | ||||
Southeast region | 227 | 139 | ||||
Continuing Operations | 1,307 | 787 | ||||
Discontinued Operations | 2 | 13 | ||||
Total backlog units | 1,309 | 800 | ||||
Dollar value of backlog at end of period (in millions) | $ | 316.3 | $ | 201.1 | ||
Revenue (in thousands): | ||||||
West region | $ | 70,777 | $ | 39,548 | ||
East region | 81,818 | 50,214 | ||||
Southeast region | 35,568 | 19,190 | ||||
Pre-owned homes | 385 | - | ||||
Total revenue | $ | 188,548 | $ | 108,952 | ||
BEAZER HOMES USA, INC. | ||||||||||||
CONSOLIDATED OPERATING AND FINANCIAL DATA - CONTINUING OPERATIONS | ||||||||||||
(Dollars in thousands) | ||||||||||||
Quarter Ended | ||||||||||||
December 31, | ||||||||||||
SUPPLEMENTAL FINANCIAL DATA | 2011 | 2010 | ||||||||||
Revenues | ||||||||||||
Homebuilding operations | $ | 186,852 | $ | 108,639 | ||||||||
Land sales and other | 1,696 | 313 | ||||||||||
Total revenues | $ | 188,548 | $ | 108,952 | ||||||||
Gross profit | ||||||||||||
Homebuilding operations | $ | 21,352 | $ | 10,951 | ||||||||
Land sales and other | 917 | 311 | ||||||||||
Total gross profit | $ | 22,269 | $ | 11,262 | ||||||||
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:
|
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Quarter Ended
December 31, |
||||||||||||
2011 | 2010 | |||||||||||
Homebuilding gross profit | $ | 21,352 | 11.4 | % | $ | 10,951 | 10.1 | % | ||||
Inventory impairments and lot option | ||||||||||||
abandonments (I&A) | 3,503 | 639 | ||||||||||
Homebuilding gross profit before I&A | 24,855 | 13.3 | % | 11,590 | 10.7 | % | ||||||
Interest amortized to cost of sales | 12,843 | 6,894 | ||||||||||
Homebuilding gross profit before I&A | ||||||||||||
and interest amortized to cost of sales | $ | 37,698 | 20.2 | % | $ | 18,484 | 17.0 | % | ||||
Reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and impairments) to 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. | ||||||||||||
Quarter Ended | ||||||||||||
December 31, | ||||||||||||
2011 | 2010 | |||||||||||
Net income (loss) | $ | 739 | $ | (48,808 | ) | |||||||
Benefit from income taxes | (36,146 | ) | (599 | ) | ||||||||
Interest expense | 31,988 | 25,817 | ||||||||||
Depreciation and amortization | 3,703 | 4,878 | ||||||||||
Impairments and abandonments | 3,507 | 921 | ||||||||||
Joint venture impairments | 29 | 267 | ||||||||||
Adjusted EBITDA | $ | 3,820 | $ | (17,524 | ) |
Source:
Beazer Homes USA, Inc.
Carey Phelps, 770-829-3700
Director,
Investor Relations & Corporate Communications
investor.relations@beazer.com