Beazer Homes Reports Record First Fiscal Quarter EPS of $3.41, Up 24%
ATLANTA, Jan. 27 /PRNewswire-FirstCall/ -- Beazer Homes USA, Inc. (NYSE: BZH) ( www.beazer.com ) today announced results for the quarter ended December 31, 2003, reporting record earnings for the quarter. Highlights of the quarter, compared to the same period of the prior year, are as follows:
Quarter Ended December 31, 2003 - Record diluted EPS: $3.41 (up 24% vs. $2.75 in prior year) - Home closings: 3,608 (up 4%) - Total revenues: $810.1 million (up 16%) - Gross Profit: $165.2 million (up 21%) - Gross margin: 20.4% (up 90 basis points) - Operating Income: $75.7 million (up 28%) - Operating Income margin: 9.3% (up 90 basis points) - Net income: $47.2 million (up 28%) - New orders: 3,304 (up 5%) - Backlog at 12/31/03: 7,122 homes (up 15%), sales value $1.65 billion (up 34%) - Active Subdivisions at 12/31/03: 506 (up 8%) Record Earnings for December Quarter
"We are pleased to announce strong financial results for our first quarter of fiscal 2004," said President and Chief Executive Officer Ian J. McCarthy. "Our home closings, revenues and new orders were all December quarter records, indicating continued strength in the housing industry and Beazer Homes' position in the market. This was accompanied by record earnings for the quarter, illustrating our ongoing commitment to achieving profitable growth by leveraging our size, scale and geographic reach, and continuing to execute specific growth and profitability initiatives."
"Beazer Homes' backlog now stands at 7,122 homes with a sales value of $1.65 billion, up 15% and 34%, respectively, from the backlog homes and sales value at December 31, 2002. This sizable backlog increase provides excellent visibility as we move forward in fiscal 2004," added McCarthy.
Strong Financial Position; Profit Margin Expansion in December Quarter
"Beazer Homes' financial position remained strong during the first fiscal quarter," said James O'Leary, Executive Vice President and Chief Financial Officer. "At December 31, 2003, debt to total capitalization and net debt to total capitalization stood at 48% and 45%, respectively, with a cash balance of $102.2 million. Furthermore, we achieved continued profit margin improvement as we continue to execute on our profit improvement initiatives."
During the first fiscal quarter of 2004, the Company increased both its gross margin and operating margin by 90 basis points compared to the same period a year ago, inclusive of increased marketing expenses associated with the Company's initiative to strengthen and leverage its brand identity. This improvement reflects continued strong industry fundamentals and continued emphasis on improved profitability. These gains were achieved despite weaker performance in the Company's Midwest operations and the inclusion of additional warranty expenses associated with construction defect claims from water intrusion at one of its Midwest divisions. The Company intends to focus efforts on improving performance in the Midwest operations and is commencing a strategic and financial review of these operations to develop an improvement plan. At this time the elements and any related costs or financial impact of such improvement plan can not be determined or estimated.
Beazer Homes Reiterates Target EPS Growth of 10-15% in Fiscal 2004
"Our strong backlog coupled with our expectations of continued strength in the housing market provide us confidence in our future growth opportunities," said McCarthy. "In addition, we expect continued execution on our strategic initiatives that leverage our national brand, capitalize on our broad geographic profile through focused product expansion and price-point diversification, and drive best practices to achieve optimal efficiencies, will place us in a strong position for continued growth. As such, we reiterate our expectation of generating diluted earnings per share in the range of $14.00 - $14.75 in fiscal 2004, representing approximately 10-15% growth over fiscal 2003."
Beazer Homes USA, Inc., headquartered in Atlanta is one of the country's ten largest single-family homebuilders with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas and Virginia. Beazer Homes also provides mortgage origination and title services to its homebuyers.
Forward-Looking Statements
Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform 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, the possibility that the Company's improvement plan for the Midwest will not achieve desired results, and other factors described in the Company's Annual Report and Form 10-K for the year ended September 30, 2003.
BEAZER HOMES USA, INC. CONSOLIDATED OPERATING AND FINANCIAL DATA (Dollars in thousands, except per share amounts) FINANCIAL DATA Quarter Ended December 31, 2003 2002 INCOME STATEMENT Revenues $810,108 $700,160 Costs and expenses: Home construction and land sales 644,949 563,717 Selling, general and administrative expense 89,507 77,377 Operating income 75,652 59,066 Other income 1,702 1,959 Income before income taxes and extraordinary item 77,354 61,025 Income taxes 30,168 24,105 Net income $47,186 $36,920 Net income per common share: Basic $3.55 $2.88 Diluted $3.41 $2.75 Weighted average shares outstanding, in thousands: Basic 13,281 12,811 Diluted 13,829 13,424 Interest incurred $16,871 $16,582 Interest amortized to cost of sales $13,687 $11,900 Depreciation and amortization $4,014 $2,731 SELECTED BALANCE SHEET DATA December 31, 2003 2002 Cash $102,267 $80,830 Inventory 1,960,408 1,418,280 Total assets 2,450,391 1,889,507 Total debt 948,465 739,417 Shareholders' equity 1,043,254 837,516 BEAZER HOMES USA, INC. CONSOLIDATED OPERATING AND FINANCIAL DATA (Continued) (Dollars in thousands) OPERATING DATA Quarter Ended December 31, SELECTED OPERATING DATA 2003 2002 Closings: Southeast region 1,257 1,093 West region 1,214 1,040 Central region 240 266 Mid-Atlantic region 318 295 Midwest region 579 788 Total closings 3,608 3,482 New orders, net of cancellations: Southeast region 1,043 1,015 West region 1,454 939 Central region 185 232 Mid-Atlantic region 316 452 Midwest region 306 503 Total new orders 3,304 3,141 Backlog at end of period 7,122 6,178 Dollar value of backlog at end of period $1,651,319 $1,234,479 Active subdivisions: Southeast region 178 179 West region 105 84 Central region 40 31 Mid-Atlantic region 48 39 Midwest region 135 135 Total active subdivisions 506 468 Quarter Ended December 31, SUPPLEMENTAL FINANCIAL DATA: 2003 2002 Revenues Home sales $793,297 $688,770 Land and lot sales 7,735 2,495 Mortgage origination revenue 12,146 12,484 Intercompany elimination - mortgage (3,070) (3,589) Total revenues $810,108 $700,160 Cost of home construction and land sales Home sales $640,117 $565,364 Land and lot sales 7,902 1,942 Intercompany elimination - mortgage (3,070) (3,589) Total costs of home construction and land sales $644,949 $563,717 Selling, general and administrative Homebuilding operations $82,113 $70,516 Mortgage origination operations 7,394 6,861 Total selling, general and administrative $89,507 $77,377
SOURCE Beazer Homes USA, Inc. CONTACT: Leslie H. Kratcoski, Director, Investor Relations of Beazer Homes USA, Inc., +1-770-829-3764, or lkratcos@beazer.com