Investors| News Releases| Beazer Homes Reports Fourth Quarter and Full Fiscal Year Results, Achievement of “2B-10” Plan, and Completion of $250 Million Debt Repurchase Plan; Announces $50 Million Stock Repurchase Plan with Matching Debt Repurchase

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Beazer Homes Reports Fourth Quarter and Full Fiscal Year Results, Achievement of “2B-10” Plan, and Completion of $250 Million Debt Repurchase Plan; Announces $50 Million Stock Repurchase Plan with Matching Debt Repurchase

November 13, 2018 at 6:30 AM EST

ATLANTA--(BUSINESS WIRE)--Nov. 13, 2018-- Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the quarter and fiscal year ended September 30, 2018.

“Strong operational results in our fourth quarter allowed us to complete our two most important objectives for fiscal 2018 - surpassing our “2B-10” goal and completing our $250 million debt reduction plan,” said Allan P. Merrill, President and CEO of Beazer Homes. “In the fourth quarter, we also finalized our acquisition of Venture Homes and welcomed our first owners to our new Gatherings community in Orlando.”

“Looking into fiscal 2019, with our long-standing commitment to delivering an ‘extraordinary value at an affordable price’ primarily for first-time and active adult buyers, we’re positioned to address the affordability challenges in the housing market. We are anticipating improved profitability, with a growing community count and a higher average selling price helping us counter more competitive market conditions. In addition, we are committing capital to both stock and debt repurchases, as we believe current pricing for our securities represents an attractive investment opportunity. Collectively, these efforts should allow us to generate a double-digit return on assets in the coming year.”

Beazer Homes Fiscal 2018 Highlights and Comparison to Fiscal 2017

  • Net loss from continuing operations of $45.0 million. Excluding impairments, abandonments, debt extinguishment costs, and the impacts from federal tax reform and the changes in the deferred tax asset valuation allowance, the Company generated net income from continuing operations of $63.8 million
  • Adjusted EBITDA of $204.7 million, up 14.5%, marking the successful completion of the Company’s “2B-10” Plan
  • Homebuilding revenue of $2.1 billion, up 9.6%
  • 5,767 new home deliveries, up 4.4%
  • Average selling price of $360.2 thousand, up 5.0%
  • Homebuilding gross margin, excluding impairments and abandonments, was 16.8%, up 20 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 21.2%, flat year over year
  • SG&A as a percentage of total revenue was 11.8%, down 40 basis points. This excludes a $2.7 million charge related to the write-off of a legacy investment in the first quarter of Fiscal 2017
  • Unit orders of 5,544, up 1.5%. Average community count was 156, down 1.0%. Sales per community per month of 3.0, up 0.4%

Beazer Homes Fiscal Fourth Quarter 2018 Highlights and Comparison to Fiscal Fourth Quarter 2017

  • Net income from continuing operations of $60.5 million, up 79.5%. Excluding impairments, abandonments, and the changes in the deferred tax asset valuation allowance, net income from continuing operations was $38.0 million
  • Adjusted EBITDA of $90.1 million, up 17.2%
  • Homebuilding revenue of $761.5 million, up 14.4%
  • 2,044 new home deliveries, up 7.4%
  • Average selling price of $372.6 thousand, up 6.6%
  • Homebuilding gross margin excluding impairments and abandonments was 17.3%, up 10 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 21.6%, down 40 basis points
  • SG&A as a percentage of total revenue was 10.1%, down 40 basis points
  • Unit orders of 1,305, down 0.8%. Average community count was 162, up 5.0%. Sales per community per month of 2.7, down 5.4%
  • Unrestricted cash at quarter end was $139.8 million

Profitability. Net income from continuing operations was $60.5 million, an increase of $26.8 million from the fourth quarter of fiscal 2017. This included a tax benefit of $18.9 million driven by an additional release of the valuation allowance for the Company’s deferred tax asset. Offsetting the tax benefit were a $1.9 million loss on debt extinguishment from the retirement of the Company’s 2019 Senior Notes, as well as $6.3 million in inventory impairments. On a pretax basis, income from continuing operations, excluding impairments, abandonments and the loss (or gain) on debt extinguishment was up more than $13 million, due to higher ASPs and improved SG&A leverage. Fourth quarter Adjusted EBITDA of $90.1 million was up $13.2 million, or 17.2%, compared to the same period in the previous fiscal year.

Full Year Profitability. For the full fiscal year, Adjusted EBITDA was $204.7 million, an increase of $25.9 million, or 14.5% from fiscal 2017. This milestone marks the successful completion of the Company’s “2B-10” Plan, surpassing the Plan’s underlying goal of achieving $200 million of EBITDA.

Orders. Net new orders for the fourth quarter decreased 0.8%, or 10 homes, versus the prior year to 1,305. While it is not possible to know the precise impact from Hurricane Florence, the Company believes orders would have been up year-over-year in the fourth quarter if operations in Myrtle Beach, Charleston and Raleigh had not been affected. Average active community count increased 5.0% year over year to 162, and the Company ended the quarter with 160 active communities. The cancellation rate was 21.5%, slightly above the fourth quarter of last year but in line with historical levels.

Homebuilding Revenue. Homebuilding revenue for the fourth quarter increased 14.4% over the prior year to $761.5 million. This was driven by a 6.6% rise in average selling price to $372.6 thousand, combined with a 7.4% increase in closings to 2,044 homes.

Backlog. The dollar value of homes in backlog as of September 30, 2018 decreased 5.7% to $628.0 million, which compared to $665.8 million in the fourth quarter of fiscal 2017. The number of homes in backlog was 1,632 homes, down from 1,855 homes at the same time last year. The decrease in backlog units was partially offset by a 7.2% increase in the average selling price of homes in backlog to $384.8 thousand.

Homebuilding Gross Margin. Homebuilding gross margin for the fourth quarter, excluding impairments and abandonments, was 17.3%, up 10 basis points from the same period last year. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 21.6%, down 40 basis points versus the prior year. While this was down on a year over year basis, it was above fourth quarter guidance of 20.5% - 21.0%, largely as a result of better warranty experience and a lower purchase accounting impact related to the acquisition of Venture Homes.

SG&A Expenses. Selling, general and administrative expenses, as a percentage of total revenue, were 10.1%, down 40 basis points versus the prior year. The improvement in operating leverage was attributable to both the strong top line growth achieved and a continued focus on overhead cost management.

Taxes. The Company’s fourth quarter income tax provision included non-cash benefits of approximately $27.8 million, of which $27.4 million related to a change in our valuation allowance.

Liquidity. The Company ended the quarter with $339.8 million of available liquidity, including $139.8 million of unrestricted cash and $200.0 million available on its undrawn secured revolving credit facility.

Debt Reduction. On September 25, 2018, the Company retired the remaining $96.4 million of outstanding 5.750% unsecured Senior Notes due 2019 using cash on the balance sheet. The transaction marked the successful completion of the Company’s three-year, $250 million debt reduction plan and left the Company with no debt maturities until 2022.

2019 Guidance. The Company intends to update its previous guidance for fiscal year 2019 on its earnings call.

Gatherings

As part of the expansion of its Gatherings active adult business, the Company now owns or has approved for acquisition, land for Gatherings communities in Maryland, Virginia, Florida, Georgia, Tennessee, and Texas. Gatherings sales activity will expand or commence in many of these markets in fiscal 2019.

Share Repurchase Program of up to $50 million Announced; First Tranche to be Completed through Accelerated Share Repurchase Program

The Company also announced that its Board of Directors has approved a new share repurchase program authorizing management to repurchase up to $50 million of the Company’s outstanding common stock. Importantly, the Company intends to reduce its outstanding Senior Notes by approximately the same dollar value of shares repurchased during fiscal 2019.

“The decision to authorize the repurchase program is part of our disciplined approach to capital allocation,” said Bob Salomon, Executive Vice President and CFO. “At current prices, buying shares and debt represents an attractive investment opportunity and reflects our confidence in our business. We remain committed to creating value for our investors in both the short and long term through our Balanced Growth strategy.”

Under the repurchase program, the Company intends to initially purchase $16.5 million of its outstanding shares pursuant to an accelerated share repurchase program (ASR). Upon completion of the ASR, the Company may execute the remaining portion of its repurchase program from time to time on the open market, through privately negotiated transactions or otherwise. Repurchases of such shares may be made under a Rule 10b5-1 plan, which would permit repurchases when the Company might otherwise be precluded from doing so under insider trading laws. The timing and amount of repurchase transactions is subject to the Company’s discretion and will depend on a variety of factors, including market and business conditions, compliance with the Company’s debt agreements, and other considerations. The Company expects to fund repurchases under the share repurchase program with cash on hand and cash generated from operations. Once the ASR has been completed, the Company is not obligated to acquire any particular number of shares remaining under its repurchase program and the program may be suspended or discontinued at any time.

In conjunction with the share repurchases and also depending upon market conditions and other corporate considerations, as determined by the Company’s management, the Company intends to repurchase or redeem a similar amount of debt during the fiscal year, in line with its ongoing objective of reducing debt and cash interest expense. Any debt repurchases or redemptions may be made from time to time on the open market, through privately negotiated transactions or otherwise and are expected to be funded with cash on hand and cash generated from operations.

Summary results for the three and twelve months ended September 30, 2018 are as follows:

Q4 Results from Continuing Operations

    Quarter Ended September 30,
    2018   2017   Change*
New home orders, net of cancellations   1,305     1,315     (0.8 )%
Orders per community per month   2.7     2.8     (5.4 )%
Average active community count   162     154     5.0 %
Actual community count at quarter-end   160     155     3.2 %
Cancellation rates   21.5 %   20.6 %  

90

 bps

               
Total home closings   2,044     1,904     7.4 %
Average selling price (ASP) from closings (in thousands)   $ 372.6     $ 349.5     6.6 %
Homebuilding revenue (in millions)   $ 761.5     $ 665.5     14.4 %
Homebuilding gross margin   17.2 %   17.0 %  

20

 bps

Homebuilding gross margin, excluding impairments and abandonments (I&A)   17.3 %   17.2 %  

10

 bps

Homebuilding gross margin, excluding I&A and interest amortized to cost of sales   21.6 %   22.0 %  

-40

 bps

               
Income from continuing operations before income taxes (in millions)   $ 41.6     $ 37.7     $ 3.9  
(Benefit) expense from income taxes (in millions)   $ (18.9 )   $ 4.0     $ (22.9 )
Income from continuing operations (in millions)   $ 60.5     $ 33.7     $ 26.8  
Basic income per share from continuing operations   $ 1.88     $ 1.05     $ 0.83  
Diluted income per share from continuing operations   $ 1.83     $ 1.03     $ 0.80  
               
Income from continuing operations before income taxes (in millions)   $ 41.6     $ 37.7     $ 3.9  
Gain (loss) on debt extinguishment (in millions)   $ (1.9 )   $ 2.9     $ (4.8 )
Inventory impairments and abandonments (in millions)   $ 6.3     $ 1.7     $ 4.6  
Income from continuing operations excluding (loss) / gain on debt extinguishment and inventory impairments and abandonments before income taxes (in millions)   $ 49.8     $ 36.5     $ 13.3  
               
Net income   $ 60.6     $ 33.7     $ 26.9  
Net income excluding (loss) / gain on debt extinguishment, inventory impairments and abandonments, and one-time tax items (in millions)+   $ 38.0     $ 29.9     $ 8.1  
               
Land and land development spending (in millions)   $ 194.8     $ 136.4     $ 58.4  
               
Adjusted EBITDA (in millions)   $ 90.1     $ 76.9     $ 13.2  
                         

* Change and totals are calculated using unrounded numbers.

                         

+ One-time tax items are comprised of the release of portions of the valuation allowance on our deferred tax assets. Loss on debt extinguishment and inventory impairments and abandonments were tax-effected at effective tax rates of 23.8% and 17.9% for the three months ended September 30, 2018 and 2017, respectively. These rates exclude the impact of one-time tax items noted above.

   

Fiscal Year Results from Continuing Operations

    Year Ended September 30,
    2018   2017   Change*
New home orders, net of cancellations   5,544     5,464     1.5 %
Orders per community per month   3.0     2.9     0.4 %
Cancellation rates   18.3 %   18.5 %  

-20

 bps

               
Total home closings   5,767     5,525     4.4 %
ASP from closings (in thousands)   $ 360.2     $ 343.1     5.0 %
Homebuilding revenue (in millions)   $ 2,077.4     $ 1,895.9     9.6 %
Homebuilding gross margin   16.8 %   16.5 %  

30

 bps

Homebuilding gross margin, excluding I&A   16.8 %   16.6 %  

20

 bps

Homebuilding gross margin, excluding I&A and interest amortized to cost of sales   21.2 %   21.2 %  

0

 bps

               
Income from continuing operations before income taxes (in millions)   $ 49.4     $ 34.6     $ 14.8  
Expense from income taxes (in millions)   $ 94.5     $ 2.7     $ 91.8  
(Loss) income from continuing operations (in millions)   $ (45.0 )   $ 32.0     $ (77.0 )
Basic (loss) income per share from continuing operations   $ (1.40 )   $ 1.00     $ (2.40 )
Diluted (loss) income per share from continuing operations   $ (1.40 )   $ 0.99     $ (2.39 )
               
Income from continuing operations before income taxes (in millions)   $ 49.4     $ 34.6     $ 14.8  
Loss on debt extinguishment (in millions)   $ 27.8     $ 12.6     $ 15.2  
Inventory impairments and abandonments (in millions)   $ 6.5     $ 2.4     $ 4.1  
Write-off of deposit on legacy land investment   $     $ 2.7     $ (2.7 )
Income from continuing operations excluding loss on debt extinguishment, inventory impairments and abandonments, and write-off of deposit before income taxes (in millions)   $ 83.7     $ 52.3     $ 31.4  
               
Net (loss) income   $ (45.4 )   $ 31.8     $ (77.2 )
Net (loss) income excluding loss on debt extinguishment, inventory impairments and abandonments, write-off of deposit, and one-time tax items (in millions)+   $ 63.8     $ 43.0     $ 20.8  
               
Land and land development spending (in millions)   $ 635.5     $ 446.4     $ 189.1  
               
Adjusted EBITDA (in millions)   $ 204.7     $ 178.8     $ 25.9  
                         

* Change and totals are calculated using unrounded numbers.

                         

+ One-time tax items are comprised of the impact of the remeasurement of our deferred tax asset as a result of the enactment of the Tax Cut and Jobs Act in December 2017 and the release of portions of the valuation allowance on our deferred tax assets. Loss on debt extinguishment, inventory impairments and abandonments, and the write-off of deposit were tax-effected at effective tax rates of 23.8% and 17.9% for the years ended September 30, 2018 and 2017, respectively. These rates exclude the impact of one-time tax items noted above.

                         
                     
                    As of September 30,
                    2018       2017       Change
Backlog units                   1,632         1,855         (12.0 )%
Dollar value of backlog (in millions)                   $ 628.0         $ 665.8         (5.7 )%
ASP in backlog (in thousands)                   $ 384.8         $ 358.9         7.2 %
Land and lots controlled                   24,188         21,507         12.5 %
                                           

Conference Call

The Company will hold a conference call on November 13, 2018 at 10:00 a.m. ET to discuss these results. Interested parties may listen to the conference call and view the Company’s slide presentation 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, enter the passcode “7072668.” A replay of the call will be available shortly after the conclusion of the live call. To directly access the replay, dial 800-860-4696 or 203-369-3836 and enter the passcode “3740” (available until 10:59 p.m. ET on November 21, 2018), 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 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 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) economic changes nationally or in local markets, changes in consumer confidence and 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; (ii) the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; (iii) 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 our production and overhead cost structure; (iv) 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; (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) 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; (vii) increases 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; (viii) our cost of and ability to access capital, due to factors such as limitations in the capital markets or adverse credit market conditions, 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) our ability to reduce our outstanding indebtedness and to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing; (x) our ability to implement and complete debt repurchases and the share repurchase program, including the ASR; (xi) increased competition or delays in reacting to changing consumer preferences in home design; (xii) weather conditions 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) estimates related to the potential recoverability of our deferred tax assets, and a potential reduction in corporate tax rates that could reduce the usefulness of our existing 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, including water intrusion issues in Florida; (xvii) the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred; (xviii) the performance of our unconsolidated entities and our unconsolidated entity partners; (xix) the impact of information technology failures or data security breaches; (xx) terrorist acts, natural disasters, acts of war or other factors over which the Company has little or no control; or (xxi) 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 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.
CONSOLIDATED STATEMENTS OF OPERATIONS
         
    Three Months Ended   Fiscal Year Ended
    September 30,   September 30,
in thousands (except per share data)   2018   2017   2018   2017
Total revenue   $ 767,945     $ 672,981     $ 2,107,133     $ 1,916,278  
Home construction and land sales expenses   635,749     557,928     1,755,619     1,600,969  
Inventory impairments and abandonments   6,331     1,693     6,499     2,445  
Gross profit   125,865     113,360     345,015     312,864  
Commissions   29,777     26,083     81,002     74,811  
General and administrative expenses   48,048     44,624     168,658     161,906  
Depreciation and amortization   4,578     4,870     13,807     14,009  
Operating income   43,462     37,783     81,548     62,138  
Equity in (loss) income of unconsolidated entities   (268 )   158     34     371  
(Loss) gain on extinguishment of debt   (1,935 )   2,933     (27,839 )   (12,630 )
Other income (expense), net   323     (3,223 )   (4,305 )   (15,230 )
Income from continuing operations before income taxes   41,582     37,651     49,438     34,649  
(Benefit) expense from income taxes   (18,902 )   3,958     94,484     2,696  
Income (loss) from continuing operations   60,484     33,693     (45,046 )   31,953  
Income (loss) from discontinued operations, net of tax   121     (39 )   (329 )   (140 )
Net income (loss)   $ 60,605     $ 33,654     $ (45,375 )   $ 31,813  
Weighted-average number of shares:                
Basic   32,221     31,974     32,141     31,952  
Diluted   33,002     32,576     32,141     32,426  
Basic income (loss) per share:                
Continuing operations   $ 1.88     $ 1.05     $ (1.40 )   $ 1.00  
Discontinued operations           (0.01 )    
Total   $ 1.88     $ 1.05     $ (1.41 )   $ 1.00  
Diluted income (loss) per share:                
Continuing operations   $ 1.83     $ 1.03     $ (1.40 )   $ 0.99  
Discontinued operations   0.01         (0.01 )    
Total   $ 1.84     $ 1.03     $ (1.41 )   $ 0.99  
                                 
                                 
    Three Months Ended   Fiscal Year Ended
    September 30,   September 30,
Capitalized Interest in Inventory   2018   2017   2018   2017
Capitalized interest in inventory, beginning of period   $ 152,182     $ 148,329     $ 139,203     $ 138,108  
Interest incurred   27,030     25,739     103,880     105,551  
Capitalized interest impaired   (1,961 )   (56 )   (1,961 )   (56 )
Interest expense not qualified for capitalization and included as other expense   (35 )   (3,404 )   (5,325 )   (15,636 )
Capitalized interest amortized to home construction and land sales expenses   (32,571 )   (31,405 )   (91,152 )   (88,764 )
Capitalized interest in inventory, end of period   $ 144,645     $ 139,203     $ 144,645     $ 139,203  
                                 
         
BEAZER HOMES USA, INC.
CONSOLIDATED BALANCE SHEETS
         
in thousands (except share and per share data)   September 30, 2018   September 30, 2017
ASSETS        
Cash and cash equivalents   $ 139,805     $ 292,147  
Restricted cash   13,443     12,462  
Accounts receivable (net of allowance of $378 and $330, respectively)   24,647     36,323  
Income tax receivable       88  
Owned inventory   1,692,284     1,542,807  
Investments in unconsolidated entities   4,035     3,994  
Deferred tax assets, net   213,955     307,896  
Property and equipment, net   20,843     17,566  
Goodwill and other intangible assets, net   9,751      
Other assets   9,339     7,712  
Total assets   $ 2,128,102     $ 2,220,995  
LIABILITIES AND STOCKHOLDERS’ EQUITY        
Trade accounts payable   $ 126,432     $ 103,484  
Other liabilities   126,389     107,659  
Total debt (net of premium of $2,640 and $3,413, respectively, and debt issuance costs of $14,336 and $14,800, respectively)   1,231,254     1,327,412  
Total liabilities   1,484,075     1,538,555  
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, 33,522,046 issued and outstanding and 33,515,768 issued and outstanding, respectively)   34     34  
Paid-in capital   880,025     873,063  
Accumulated deficit   (236,032 )   (190,657 )
Total stockholders’ equity   644,027     682,440  
Total liabilities and stockholders’ equity   $ 2,128,102     $ 2,220,995  
         
Inventory Breakdown        
Homes under construction   $ 476,752     $ 419,312  
Development projects in progress   907,793     785,777  
Land held for future development   83,173     112,565  
Land held for sale   7,781     17,759  
Capitalized interest   144,645     139,203  
Model homes   72,140     68,191  
Total owned inventory   $ 1,692,284     $ 1,542,807  
                 
         
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
         
    Quarter Ended September 30,   Fiscal Year Ended September 30,
SELECTED OPERATING DATA   2018   2017   2018   2017
Closings:                
West region   1,016     832     2,895     2,527
East region   418     533     1,221     1,382
Southeast region   610     539     1,651     1,616
Total closings   2,044

 

  1,904     5,767     5,525
                 
New orders, net of cancellations:                
West region   639     637     2,874     2,578
East region   235     324     1,089     1,351
Southeast region   431     354     1,581     1,535
Total new orders, net   1,305     1,315     5,544     5,464
                 
            Fiscal Year Ended September 30,
Backlog units at end of period:           2018   2017
West region           858     879
East region           281     413
Southeast region           493     563
Total backlog units           1,632     1,855
Dollar value of backlog at end of period (in millions)           $ 628.0     $ 665.8
                       
                       
    Quarter Ended September 30,   Fiscal Year Ended September 30,
SUPPLEMENTAL FINANCIAL DATA   2018   2017   2018   2017
Homebuilding revenue:                
West region   $ 357,094     $ 286,564     $ 999,599     $ 851,472
East region   192,411     209,301     510,710     533,585
Southeast region   212,022     169,594     567,051     510,798
Total homebuilding revenue   $ 761,527     $ 665,459     $ 2,077,360     $ 1,895,855
                 
Revenues:                
Homebuilding   $ 761,527     $ 665,459     $ 2,077,360     $ 1,895,855
Land sales and other   6,418     7,522     29,773     20,423
Total revenues   $ 767,945     $ 672,981     $ 2,107,133     $ 1,916,278
                 
Gross profit:                
Homebuilding   $ 130,634     $ 113,011     $ 348,275     $ 312,201
Land sales and other   (4,769 )   349     (3,260 )   663
Total gross profit   $ 125,865     $ 113,360     $ 345,015     $ 312,864
                               

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 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.

      Quarter Ended September 30,     Fiscal Year Ended September 30,
      2018   2017     2018   2017
Homebuilding gross profit/margin     $ 130,634     17.2 %   $ 113,011     17.0 %     $ 348,275     16.8 %   $ 312,201     16.5 %
Inventory impairments and abandonments (I&A)     1,005         1,693           1,005         1,881      
Homebuilding gross profit/margin before I&A     131,639     17.3 %   114,704     17.2 %     349,280     16.8 %   314,082     16.6 %
Interest amortized to cost of sales     32,568         31,405           91,132         88,764      
Homebuilding gross profit/margin before I&A and interest amortized to cost of sales     $ 164,207     21.6 %   $ 146,109     22.0 %     $ 440,412     21.2 %   $ 402,846     21.2 %
                                                             

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 determined in accordance with GAAP as an indicator of operating performance.

    Quarter Ended

September 30,

 

Fiscal Year Ended
September 30,

    2018   2017   2018   2017
Net income (loss)   $ 60,605     $ 33,654     $ (45,375 )   $ 31,813
(Benefit) expense from income taxes   (18,860 )   3,953     94,373     2,621
Interest amortized to home construction and land sales expenses and capitalized interest impaired   32,750     31,462     91,331     88,820
Interest expense not qualified for capitalization   35     3,404     5,325     15,636
EBIT   74,530     72,473     145,654     138,890
Depreciation and amortization and stock-based compensation amortization   7,144     5,702     24,065     22,173
EBITDA   81,674     78,175     169,719     161,063
Loss (gain) on extinguishment of debt   1,935     (2,933 )   27,839     12,630
Inventory impairments and abandonments   6,152     1,637     6,770     2,389
Joint venture impairment and abandonment charges   341         341    
Write-off of deposit on legacy land investment               2,700
Adjusted EBITDA   $ 90,102     $ 76,879     $ 204,669     $ 178,782
                               

 

Source: Beazer Homes USA, Inc.

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