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Beazer Homes Reports Strong Third Quarter Fiscal 2020 Results; Announces Succession Plan for Chief Financial Officer

July 30, 2020 at 4:15 PM EDT

ATLANTA--(BUSINESS WIRE)--Jul. 30, 2020-- Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three and nine months ended June 30, 2020.

“We generated very strong results in the third quarter, as improvements in home closings and margins allowed us to substantially improve profitability,” said Allan P. Merrill, Chairman and Chief Executive Officer of Beazer Homes. “After weathering difficult sales conditions in April, we experienced much stronger demand in the second half of the quarter, culminating in our best June sales month in more than ten years. We also took steps to adjust to the new operating environment by enhancing our liquidity, re-underwriting proposed land acquisition transactions and improving our cost structure. Looking forward, we’re optimistic about the prospects for new home demand as well as our ability to execute on our Balanced Growth strategy.”

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

  • Net income from continuing operations of $15.3 million, compared to net income from continuing operations of $11.6 million in fiscal third quarter 2019
  • Adjusted EBITDA of $54.0 million, up 39.6%
  • Homebuilding revenue of $532.5 million, up 10.4% on a 7.6% increase in home closings to 1,366 and a 2.6% increase in average selling price to $389.8 thousand
  • Homebuilding gross margin was 17.0%, up 210 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 21.2%, up 180 basis points
  • SG&A as a percentage of total revenue was 11.7%, down 50 basis points year-over-year
  • Unit orders of 1,372, down 11.1% on a decrease in orders/community/month to 2.7 and a decrease in average community count to 167
  • Dollar value of backlog of $884.9 million, which was essentially flat
  • Unrestricted cash at quarter end was $152.3 million; total liquidity was $402.3 million

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

Profitability. Third quarter net income from continuing operations was $15.3 million, generating diluted earnings per share of $0.51. This included impairment charges of $2.3 million and restructuring and severance charges of $1.4 million. Adjusted EBITDA of $54.0 million was up $15.3 million year-over-year.

Orders. Net new orders for the third quarter decreased 11.1% year-over-year, to 1,372. The decrease in net new orders was driven by a decrease in the absorption rate to 2.7 sales per community per month, down from 3.0 in the previous year, and a decrease in average community count to 167, down from 174 in the previous year. Net orders improved sequentially each month with April orders down, May orders essentially flat, and June orders up more than 40% year-over-year. The cancellation rate for the quarter was 21.1%, up 590 basis points year-over-year. Early in the quarter, the cancellation rate spiked from a combination of declining orders and increasing cancellations. As conditions improved, the cancellation rate normalized, ending with a June cancellation rate of 13.9%.

Homebuilding Revenue. Third quarter closings rose 7.6% to 1,366 homes. Combined with a 2.6% increase in the average selling price to $389.8 thousand, homebuilding revenue was $532.5 million, up 10.4% year-over-year.

Backlog. The dollar value of homes in backlog as of June 30, 2020 was $884.9 million, or 2,237 homes, essentially flat compared to $881.6 million, or 2,264 homes, at the same time last year. The average selling price of homes in backlog was $395.6 thousand, up 1.6% year-over-year.

Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 21.2% for the third quarter, up 180 basis points year-over-year. The increase in homebuilding gross margin was primarily driven by margin improvement on spec homes and reduced incentives.

SG&A Expenses. Selling, general and administrative expenses as a percentage of total revenue was 11.7% for the quarter, down 50 basis points year-over-year.

Liquidity. At the close of the third quarter, the Company had approximately $402.3 million of available liquidity, including $152.3 million of unrestricted cash and $250.0 million available on its secured revolving credit facility.

Succession Plan for Chief Financial Officer

The Company also announced the retirement and succession plans for Robert L. Salomon, Executive Vice President and Chief Financial Officer. Mr. Salomon has decided to retire after a 28-year career in homebuilding following the filing of the Company’s 10-K for the fiscal year ending September 30, 2020 in November. Mr. Salomon joined the Company as Chief Accounting Officer in February 2008 and was promoted to Executive Vice President and Chief Financial Officer in June 2011. Upon Mr. Salomon’s retirement, the Company will be appointing David I. Goldberg to serve as Senior Vice President and Chief Financial Officer. Mr. Goldberg currently serves as the Company’s Vice President and Treasurer, positions he has held since joining the Company in March 2015.

“Bob has been an indispensable part of our management team from the day he joined the Company,” said Mr. Merrill. “He’s been my valued business partner as well as a mentor to operational and corporate leaders across the Company. Since joining us, he has successfully led or managed our financial reporting, internal audit, business planning, capital markets and treasury activities, and in recent years he has overseen crucial corporate functions including land acquisition and information technology. While we will miss his contributions after the end of our fiscal year, he has established a deep and talented finance team, led by David Goldberg. I am very confident that David, working closely with our experienced Senior Leadership Team, will allow us to complete a smooth and successful leadership transition in fiscal 2021.”

Summary results for the three and nine months ended June 30, 2020 are as follows:

 

Three Months Ended June 30,

 

2020

 

2019

 

Change*

New home orders, net of cancellations

1,372

 

 

1,544

 

 

(11.1)

%

Orders per community per month

2.7

 

 

3.0

 

 

(7.4)

%

Average active community count

167

 

 

174

 

 

(4.0)

%

Actual community count at quarter-end

164

 

 

173

 

 

(5.2)

%

Cancellation rates

21.1

%

 

15.2

%

 

590 bps

 

 

 

 

 

 

Total home closings

1,366

 

 

1,269

 

 

7.6

%

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

$

389.8

 

 

$

380.1

 

 

2.6

%

Homebuilding revenue (in millions)

$

532.5

 

 

$

482.3

 

 

10.4

%

Homebuilding gross margin

17.0

%

 

14.9

%

 

210 bps

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

17.1

%

 

14.9

%

 

220 bps

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

21.2

%

 

19.4

%

 

180 bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

20.3

 

 

$

9.4

 

 

$

10.8

 

Expense (benefit) from income taxes (in millions)

$

5.0

 

 

$

(2.2)

 

 

$

7.2

 

Income from continuing operations (in millions)

$

15.3

 

 

$

11.6

 

 

$

3.6

 

Basic income per share from continuing operations

$

0.51

 

 

$

0.38

 

 

$

0.13

 

Diluted income per share from continuing operations

$

0.51

 

 

$

0.38

 

 

$

0.13

 

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

20.3

 

 

$

9.4

 

 

$

10.8

 

Gain on debt extinguishment (in millions)

$

 

 

$

0.4

 

 

$

(0.4)

 

Inventory impairments and abandonments (in millions)

$

(2.3)

 

 

$

 

 

$

(2.3)

 

Restructuring and severance charges

$

(1.4)

 

 

$

 

 

$

(1.4)

 

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

$

24.0

 

 

$

9.0

 

 

$

15.0

 

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

$

17.6

 

 

$

11.2

 

 

$

6.4

 

 

 

 

 

 

 

Net income

$

15.2

 

 

$

11.6

 

 

$

3.6

 

 

 

 

 

 

 

Land and land development spending (in millions)

$

55.7

 

 

$

102.8

 

 

$

(47.1)

 

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

54.0

 

 

$

38.7

 

 

$

15.3

 

LTM Adjusted EBITDA (in millions)

$

209.4

 

 

$

188.2

 

 

$

21.1

 

*

Change and totals are calculated using unrounded numbers.

+

For the three months ended June 30, 2020, inventory impairments and abandonments and restructuring and severance charges were tax-effected at the effective tax rate of 26.4%. For the three months ended June 20, 2019, gain on debt extinguishment was tax-effected at the effective tax rate of 25.7%.

"LTM" indicates amounts for the trailing 12 months.

 

Nine Months Ended June 30,

 

2020

 

2019

 

Change*

New home orders, net of cancellations

4,284

 

 

4,118

 

 

4.0

%

LTM orders per community per month

2.9

 

 

2.7

 

 

7.4

%

Cancellation rates

17.3

%

 

16.1

%

 

120 bps

 

 

 

 

 

 

Total home closings

3,755

 

 

3,486

 

 

7.7

%

ASP from closings (in thousands)

$

382.9

 

 

$

374.1

 

 

2.4

%

Homebuilding revenue (in millions)

$

1,437.9

 

 

$

1,304.2

 

 

10.2

%

Homebuilding gross margin

16.1

%

 

6.8

%

 

930 bps

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

16.2

%

 

15.2

%

 

100 bps

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

20.7

%

 

19.6

%

 

110 bps

 

 

 

 

 

 

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

$

37.6

 

 

$

(126.1)

 

 

$

163.8

 

Expense (benefit) from income taxes (in millions)

$

8.9

 

 

$

(44.3)

 

 

$

53.2

 

Income (loss) from continuing operations (in millions)

$

28.7

 

 

$

(81.9)

 

 

$

110.6

 

Basic income (loss) per share from continuing operations

$

0.96

 

 

$

(2.65)

 

 

$

3.61

 

Basic income (loss) per share from continuing operations

$

0.95

 

 

$

(2.65)

 

 

$

3.60

 

 

 

 

 

 

 

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

$

37.6

 

 

$

(126.1)

 

 

$

163.8

 

Gain on debt extinguishment (in millions)

$

 

 

$

0.6

 

 

$

(0.6)

 

Inventory impairments and abandonments (in millions)

$

(2.3)

 

 

$

(148.6)

 

 

$

146.4

 

Restructuring and severance charges

$

(1.4)

 

 

$

 

 

$

(1.4)

 

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

$

41.3

 

 

$

21.9

 

 

$

19.4

 

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

$

31.4

 

 

$

25.5

 

 

$

5.9

 

 

 

 

 

 

 

Net income (loss)

$

28.5

 

 

$

(81.9)

 

 

$

110.5

 

 

 

 

 

 

 

Land and land development spending (in millions)

$

324.7

 

 

$

363.6

 

 

$

(38.9)

 

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

127.3

 

 

$

98.1

 

 

$

29.2

 

*

Change and totals are calculated using unrounded numbers.

+

For the nine months ended June 30, 2020, inventory impairments and abandonments and restructuring and severance charges were tax-effected at the effective tax rate of 26.4%. For the nine months ended June 30, 2019, gain on debt extinguishment and inventory impairments and abandonments were tax-effected at the effective tax rate of 25.7%.

“LTM” indicates amounts for the trailing 12 months.

 

As of June 30,

 

2020

 

2019

 

Change

Backlog units

2,237

 

 

2,264

 

 

(1.2)

%

Dollar value of backlog (in millions)

$

884.9

 

 

$

881.6

 

 

0.4

%

ASP in backlog (in thousands)

$

395.6

 

 

$

389.4

 

 

1.6

%

Land and lots controlled

18,093

 

 

21,717

 

 

(16.7)

%

Conference Call

The Company will hold a conference call on July 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 10:00 PM ET on August 7, 2020 at 886-463-2180 (for international callers, dial 203-369-1377) with pass code “3740”.

About Beazer Homes

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, which will save 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 ongoing 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; (xviii) 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

 

Nine Months Ended

 

June 30,

 

June 30,

in thousands (except per share data)

2020

 

2019

 

2020

 

2019

Total revenue

$

533,112

 

 

$

482,738

 

 

$

1,440,329

 

 

$

1,306,038

 

Home construction and land sales expenses

441,788

 

 

410,974

 

 

1,207,023

 

 

1,107,681

 

Inventory impairments and abandonments

2,266

 

 

 

 

2,266

 

 

148,618

 

Gross profit

89,058

 

 

71,764

 

 

231,040

 

 

49,739

 

Commissions

20,851

 

 

18,230

 

 

55,660

 

 

49,965

 

General and administrative expenses

41,276

 

 

40,749

 

 

121,025

 

 

116,763

 

Depreciation and amortization

3,780

 

 

3,242

 

 

10,834

 

 

8,912

 

Operating income (loss)

23,151

 

 

9,543

 

 

43,521

 

 

(125,901)

 

Equity in income of unconsolidated entities

4

 

 

299

 

 

138

 

 

316

 

Gain on extinguishment of debt

 

 

358

 

 

 

 

574

 

Other expense, net

(2,904)

 

 

(755)

 

 

(6,030)

 

 

(1,134)

 

Income (loss) from continuing operations before income taxes

20,251

 

 

9,445

 

 

37,629

 

 

(126,145)

 

Expense (benefit) from income taxes

4,981

 

 

(2,180)

 

 

8,940

 

 

(44,260)

 

Income (loss) from continuing operations

15,270

 

 

11,625

 

 

28,689

 

 

(81,885)

 

Loss from discontinued operations, net of tax

(82)

 

 

(23)

 

 

(141)

 

 

(64)

 

Net income (loss)

$

15,188

 

 

$

11,602

 

 

$

28,548

 

 

$

(81,949)

 

Weighted average number of shares:

 

 

 

 

 

 

 

Basic

29,597

 

 

30,250

 

 

29,738

 

 

30,926

 

Diluted

29,674

 

 

30,489

 

 

30,014

 

 

30,926

 

 

 

 

 

 

 

 

 

Basic income (loss) per share:

 

 

 

 

 

 

 

Continuing operations

$

0.51

 

 

$

0.38

 

 

$

0.96

 

 

$

(2.65)

 

Discontinued operations

 

 

 

 

 

 

 

Total

$

0.51

 

 

$

0.38

 

 

$

0.96

 

 

$

(2.65)

 

Diluted income (loss) per share:

 

 

 

 

 

 

 

Continuing operations

$

0.51

 

 

$

0.38

 

 

$

0.95

 

 

$

(2.65)

 

Discontinued operations

 

 

 

 

 

 

 

Total

$

0.51

 

 

$

0.38

 

 

$

0.95

 

 

$

(2.65)

 

 

Three Months Ended

 

Nine Months Ended

 

June 30,

 

June 30,

Capitalized Interest in Inventory

2020

 

2019

 

2020

 

2019

Capitalized interest in inventory, beginning of period

$

134,693

 

 

$

144,756

 

 

$

136,565

 

 

$

144,645

 

Interest incurred

23,012

 

 

26,782

 

 

66,839

 

 

77,506

 

Capitalized interest impaired

(792)

 

 

 

 

(792)

 

 

(13,907)

 

Interest expense not qualified for capitalization and included as other expense

(3,003)

 

 

(961)

 

 

(6,373)

 

 

(1,800)

 

Capitalized interest amortized to home construction and land sales expenses

(21,814)

 

 

(21,752)

 

 

(64,143)

 

 

(57,619)

 

Capitalized interest in inventory, end of period

$

132,096

 

 

$

148,825

 

 

$

132,096

 

 

$

148,825

 

BEAZER HOMES USA, INC. 

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

in thousands (except share and per share data)

June 30, 2020

 

September 30, 2019

ASSETS

 

 

 

Cash and cash equivalents

$

152,266

 

 

$

106,741

 

Restricted cash

13,086

 

 

16,053

 

Accounts receivable (net of allowance of $298 and $304, respectively)

17,846

 

 

26,395

 

Income tax receivable

9,224

 

 

4,935

 

Owned inventory

1,511,560

 

 

1,504,248

 

Investments in unconsolidated entities

4,044

 

 

3,962

 

Deferred tax assets, net

233,986

 

 

246,957

 

Property and equipment, net

24,078

 

 

27,421

 

Operating lease right-of-use assets

14,060

 

 

 

Goodwill

11,376

 

 

11,376

 

Other assets

10,637

 

 

9,556

 

Total assets

$

2,002,163

 

 

$

1,957,644

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Trade accounts payable

$

131,200

 

 

$

131,152

 

Operating lease liabilities

16,292

 

 

 

Other liabilities

110,630

 

 

109,429

 

Obligations related to land not owned under option agreements

 

 

 

Total debt (net of debt issuance costs of $11,450 and $12,470, respectively)

1,179,725

 

 

1,178,309

 

Total liabilities

1,437,847

 

 

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, 31,020,066 issued and outstanding and 30,933,110 issued and outstanding, respectively)

31

 

 

31

 

Paid-in capital

851,289

 

 

854,275

 

Accumulated deficit

(287,004)

 

 

(315,552)

 

Total stockholders’ equity

564,316

 

 

538,754

 

Total liabilities and stockholders’ equity

$

2,002,163

 

 

$

1,957,644

 

 

 

 

 

Inventory Breakdown

 

 

 

Homes under construction

$

607,731

 

 

$

507,542

 

Development projects in progress

647,583

 

 

738,201

 

Land held for future development

28,531

 

 

28,531

 

Land held for sale

16,863

 

 

12,662

 

Capitalized interest

132,096

 

 

136,565

 

Model homes

78,756

 

 

80,747

 

Total owned inventory

$

1,511,560

 

 

$

1,504,248

 

BEAZER HOMES USA, INC. 

CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

SELECTED OPERATING DATA

2020

 

2019

 

2020

 

2019

Closings:

 

 

 

 

 

 

 

West region

819

 

 

674

 

 

2,248

 

 

1,881

 

East region

220

 

 

246

 

 

647

 

 

647

 

Southeast region

327

 

 

349

 

 

860

 

 

958

 

Total closings

1,366

 

 

1,269

 

 

3,755

 

 

3,486

 

 

 

 

 

 

 

 

 

New orders, net of cancellations:

 

 

 

 

 

 

 

West region

775

 

 

850

 

 

2,465

 

 

2,175

 

East region

287

 

 

334

 

 

871

 

 

869

 

Southeast region

310

 

 

360

 

 

948

 

 

1,074

 

Total new orders, net

1,372

 

 

1,544

 

 

4,284

 

 

4,118

 

 

 

As of June 30,

Backlog units at end of period:

 

2020

 

2019

West region

 

1,199

 

 

1,152

 

East region

 

565

 

 

503

 

Southeast region

 

473

 

 

609

 

Total backlog units

 

2,237

 

 

2,264

 

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

 

$

884.9

 

 

$

881.6

 

in thousands

Three Months Ended June 30,

 

Nine Months Ended June 30,

SUPPLEMENTAL FINANCIAL DATA

2020

 

2019

 

2020

 

2019

Homebuilding revenue:

 

 

 

 

 

 

 

West region

$

303,500

 

 

$

238,723

 

 

$

825,129

 

 

$

658,097

 

East region

108,126

 

 

117,934

 

 

295,782

 

 

299,450

 

Southeast region

120,839

 

 

125,659

 

 

316,939

 

 

346,696

 

Total homebuilding revenue

$

532,465

 

 

$

482,316

 

 

$

1,437,850

 

 

$

1,304,243

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Homebuilding

$

532,465

 

 

$

482,316

 

 

$

1,437,850

 

 

$

1,304,243

 

Land sales and other

647

 

 

422

 

 

2,479

 

 

1,795

 

Total revenue

$

533,112

 

 

$

482,738

 

 

$

1,440,329

 

 

$

1,306,038

 

 

 

 

 

 

 

 

 

Gross profit (loss):

 

 

 

 

 

 

 

Homebuilding

$

90,282

 

 

$

71,719

 

 

$

232,134

 

 

$

88,190

 

Land sales and other

(1,224)

 

 

45

 

 

(1,094)

 

 

(38,451)

 

Total gross profit (loss)

$

89,058

 

 

$

71,764

 

 

$

231,040

 

 

$

49,739

 

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.

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

in thousands

2020

 

2019

 

2020

 

2019

Homebuilding gross profit/margin

$

90,282

 

17.0

%

 

$

71,719

 

14.9

%

 

$

232,134

 

16.1

%

 

$

88,190

 

6.8

%

Inventory impairments and abandonments (I&A)

1,009

 

 

 

 

 

 

1,009

 

 

 

110,030

 

 

Homebuilding gross profit/margin before I&A

91,291

 

17.1

%

 

71,719

 

14.9

%

 

233,143

 

16.2

%

 

198,220

 

15.2

%

Interest amortized to cost of sales

21,814

 

 

 

21,752

 

 

 

64,143

 

 

 

57,619

 

 

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

$

113,105

 

21.2

%

 

$

93,471

 

19.4

%

 

$

297,286

 

20.7

%

 

$

255,839

 

19.6

%

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 June 30,

 

Nine Months Ended June 30,

 

LTM Ended

in thousands

2020

 

2019

 

2020

 

2019

 

2020

 

2019

Net income (loss)

$

15,188

 

 

$

11,602

 

 

$

28,548

 

 

$

(81,949)

 

 

$

30,977

 

 

$

(21,344)

 

Expense (benefit) from income taxes

4,958

 

 

(2,187)

 

 

8,900

 

 

(44,279)

 

 

15,934

 

 

(63,139)

 

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

22,606

 

 

21,752

 

 

64,935

 

 

71,526

 

 

102,350

 

 

106,058

 

Interest expense not qualified for capitalization

3,003

 

 

961

 

 

6,373

 

 

1,800

 

 

7,682

 

 

1,835

 

EBIT

45,755

 

 

32,128

 

 

108,756

 

 

(52,902)

 

 

156,943

 

 

23,410

 

Depreciation and amortization

3,780

 

 

3,242

 

 

10,834

 

 

8,912

 

 

16,681

 

 

13,490

 

EBITDA

49,535

 

 

35,370

 

 

119,590

 

 

(43,990)

 

 

173,624

 

 

36,900

 

Stock-based compensation expense

1,659

 

 

3,699

 

 

4,869

 

 

7,993

 

 

7,402

 

 

10,559

 

(Gain) loss on extinguishment of debt

 

 

(358)

 

 

 

 

(574)

 

 

25,494

 

 

1,361

 

Inventory impairments and abandonments (b)

1,474

 

 

 

 

1,474

 

 

134,711

 

 

1,474

 

 

139,081

 

Restructuring and severance expenses

1,361

 

 

 

 

1,361

 

 

 

 

1,361

 

 

 

Adjusted EBITDA

$

54,029

 

 

$

38,711

 

 

$

127,294

 

 

$

98,140

 

 

$

209,355

 

 

$

188,242

 

(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.”

 

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

Source: Beazer Homes USA, Inc.