Beazer Homes Reports Third Quarter Fiscal 2009 Results
-
Reported loss from continuing operations of
$(27.9) million , or$(0.72) per share, including non-cash pre-tax charges of$16.7 million , consisting of inventory impairments and abandonment of land option contracts of$11.9 million and impairments in joint ventures of$4.8 million . These results also include a non-cash deferred tax valuation allowance of$4.5 million and a$55.2 million gain on extinguishment of debt, as described further below. For the third quarter of the prior fiscal year, the Company reported a loss from continuing operations of$(109.7) million , or$(2.85) per share. -
Total revenue:
$224.7 million , compared to$455.6 million in the third quarter of the prior year. - Home closings: 950 homes, representing a decrease year-over-year of 33.2% in markets where the Company maintains a presence.
- New orders: 1,537 homes, representing a decrease year-over-year of 5.0% in markets where the Company maintains a presence.
- The cancellation rate for the third quarter improved to 23.0%, compared to 29.8% in the second quarter of this fiscal year and 36.8% in the third quarter of the prior year.
-
Cash and cash equivalents as of
June 30, 2009 :$464.9 million , compared to$559.5 million atMarch 31, 2009 and$314.2 million atJune 30, 2008 . During the quarter, the Company repurchased$115.5 million of senior notes for an aggregate purchase price of$58.2 million or an average price of 50.4%, resulting in a gain on the extinguishment of debt of$55.2 million . -
Backlog as of
June 30, 2009 : 1,867 homes with a sales value of$430.8 million compared to 1,280 homes with a sales value of$296.6 million as ofMarch 31, 2009 , and 2,716 homes with a sales value of$668.1 million as ofJune 30, 2008 .
Results for the Quarter Ended
Homebuilding revenues declined 48.3% in the June quarter, due to a 43.4% decline in total home closings and an 8.7% decline in the average selling price of homes closed compared to the same period of the prior year. Home closings declined 33.2% in markets where the Company maintains a presence (West, East and Southeast segments) and 99.2% in the Company’s exit markets (Other segment). Net new home orders totaled 1,537 for the quarter, a decrease of 13.4% from 1,774 net orders in the third quarter of the prior fiscal year. Net orders declined 5.0% in markets where the Company maintains a presence and 99.4% in its exit markets. The cancellation rate for the third quarter improved to 23.0%, compared to 29.8% in the second quarter of this fiscal year and 36.8% in the third quarter of the prior year.
Overall, margins continued to be negatively impacted by weak market
conditions, impacting both closing volumes and pricing, and as a result
of non-cash pre-tax charges for inventory impairments, lot option
abandonments and joint venture impairments of
The Company controlled 32,904 lots at
Liquidity and Liability Management Initiatives
Cash Position and Senior Notes Repurchases
At
During the quarter, the Company repurchased
Secured Revolving Credit Facility
As a result of its current liquidity position and reduced working capital needs in the current economic environment, the Company does not foresee any need for cash borrowings on its secured revolving credit facility during its remaining term. As a result, the Company has decided to amend and restructure its secured revolving credit facility.
As part of this restructuring, the current Secured Revolving Credit
Facility was reduced to
Due to this restructuring, the Company recognized expense of
Conference Call
The Company will hold a conference call today,
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 timing and final
outcome any state and federal agency investigations, as well as the
results of any other litigation or government proceedings; (ii)
additional asset impairment charges or writedowns; (iii) economic
changes nationally or in local markets, including changes in consumer
confidence, volatility of mortgage interest rates and inflation; (iv)
continued or increased downturn in the homebuilding industry; (v)
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, (vi) our ability to maintain the listing of our
common stock on the
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 amounts) | ||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
INCOME STATEMENT | ||||||||||||||||
Total revenue | $ | 224,653 | $ | 455,578 | $ | 645,340 |
$ |
1,361,649 |
||||||||
Home construction and land sales expenses | 207,176 | 407,512 | 580,920 | 1,223,252 | ||||||||||||
Inventory impairments and option contract abandonments | 11,856 | 95,482 | 76,320 | 451,854 | ||||||||||||
Gross profit (loss) | 5,621 | (47,416 | ) | (11,900 | ) | (313,457 | ) | |||||||||
Selling, general and administrative expenses | 51,357 | 83,517 | 174,596 | 245,696 | ||||||||||||
Depreciation & amortization | 4,957 | 6,046 | 13,079 | 18,250 | ||||||||||||
Goodwill impairment | - | 4,365 | 16,143 | 52,470 | ||||||||||||
Operating loss | (50,693 | ) | (141,344 | ) | (215,718 | ) | (629,873 | ) | ||||||||
Equity in loss of unconsolidated joint ventures | (4,041 | ) | (18,568 | ) | (13,795 | ) | (75,069 | ) | ||||||||
Gain on extinguishment of debt | 55,214 | - | 58,788 | - | ||||||||||||
Other expense, net | (22,370 | ) | (13,489 | ) | (59,958 | ) | (20,907 | ) | ||||||||
Loss from continuing operations before income taxes | (21,890 | ) | (173,401 | ) | (230,683 | ) | (725,849 | ) | ||||||||
Provision for (benefit from) income taxes | 5,990 | (63,707 | ) | (7,981 | ) | (249,771 | ) | |||||||||
Loss from continuing operations | (27,880 | ) | (109,694 | ) | (222,702 | ) | (476,078 | ) | ||||||||
Loss from discontinued operations, net of tax | (96 | ) | (148 | ) | (472 | ) | (1,893 | ) | ||||||||
Net loss | $ | (27,976 | ) | $ | (109,842 | ) |
$ |
(223,174) |
$ | (477,971 | ) | |||||
Loss per common share from continuing operations: | ||||||||||||||||
Basic |
$ | (0.72 | ) | $ | (2.85 | ) | $ | (5.76 | ) | $ | (12.35 | ) | ||||
Diluted |
$ | (0.72 | ) | $ | (2.85 | ) | $ | (5.76 | ) | $ | (12.35 | ) | ||||
Loss per common share from discontinued operations: | ||||||||||||||||
Basic |
$ | (0.00 | ) | (0.00 | ) | $ | (0.01 | ) | $ | (0.05 | ) | |||||
Diluted |
$ | (0.00 | ) | (0.00 | ) | $ | (0.01 | ) | $ | (0.05 | ) | |||||
Loss per common share: | ||||||||||||||||
Basic |
$ | (0.72 | ) | $ | (2.85 | ) | $ | (5.77 | ) | $ | (12.40 | ) | ||||
Diluted |
$ | (0.72 | ) | $ | (2.85 | ) | $ | (5.77 | ) | $ | (12.40 | ) | ||||
Weighted average shares outstanding, in thousands: | ||||||||||||||||
Basic |
38,815 | 38,551 | 38,666 | 38,546 | ||||||||||||
Diluted |
38,815 | 38,551 | 38,666 | 38,546 | ||||||||||||
Interest Data: | ||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||
June 30, | June 30, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
Capitalized interest in inventory, beginning of period | $ | 45,466 | $ | 78,665 | $ | 45,977 | $ | 87,560 | ||||||||
Interest incurred | 35,806 | 34,234 | 103,059 | 105,214 | ||||||||||||
Capitalized interest impaired | (160 | ) | (1,875 | ) | (2,113 | ) | (12,468 | ) | ||||||||
Interest expense not qualified for capitalization and included as other expense |
(23,727 | ) | (15,873 | ) | (65,986 | ) | (35,866 | ) | ||||||||
Capitalized interest amortized to house construction and land sales expense |
(12,999 | ) | (26,693 | ) | (36,551 | ) | (75,982 | ) | ||||||||
Capitalized interest in inventory, end of period | $ | 44,386 | $ | 68,458 | $ | 44,386 | $ | 68,458 | ||||||||
BEAZER HOMES USA, INC. | ||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||
(in thousands, except per share amounts) | ||||||||
CONSOLIDATED BALANCE SHEETS | June 30, | September 30, | ||||||
2009 | 2008 | |||||||
Assets | ||||||||
Cash and cash equivalents | $ | 464,949 | $ | 584,334 | ||||
Restricted cash | 11,902 | 297 | ||||||
Accounts receivable, net | 26,185 | 46,555 | ||||||
Income tax receivable | 13,957 | 173,500 | ||||||
Inventory | ||||||||
Owned inventory | 1,397,181 | 1,545,006 | ||||||
Consolidated inventory not owned | 58,542 | 106,655 | ||||||
Total inventory | 1,455,723 | 1,651,661 | ||||||
Investments in unconsolidated joint ventures | 29,905 | 33,065 | ||||||
Deferred tax assets, net | 22,109 | 20,216 | ||||||
Property, plant and equipment, net | 30,071 | 39,822 | ||||||
Goodwill | - | 16,143 | ||||||
Other assets | 53,788 | 76,206 | ||||||
Total assets | $ | 2,108,589 | $ | 2,641,799 | ||||
Liabilities and Stockholders' Equity | ||||||||
Trade accounts payable | $ | 76,461 | $ | 90,371 | ||||
Other liabilities | 248,973 | 358,592 | ||||||
Obligations related to consolidated inventory not owned | 31,764 | 70,608 | ||||||
Senior Notes (net of discounts of $2,013 and $2,565, respectively) | 1,407,486 | 1,522,435 | ||||||
Junior subordinated notes | 103,093 | 103,093 | ||||||
Other secured notes payable | 34,122 | 50,618 | ||||||
Model home financing obligations | 46,908 | 71,231 | ||||||
Total liabilities | 1,948,807 | 2,266,948 | ||||||
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, 80,000,000 shares authorized, 42,605,804 and 42,612,801 issued and 39,248,648 and 39,270,038 outstanding, respectively) |
43 | 43 | ||||||
Paid-in capital | 565,037 | 556,910 | ||||||
Retained earnings | (221,329 | ) | 1,845 | |||||
Treasury stock, at cost (3,357,156 and 3,342,763 shares, respectively) | (183,969 | ) | (183,947 | ) | ||||
Total stockholders' equity | 159,782 | 374,851 | ||||||
Total liabilities and stockholders' equity | $ | 2,108,589 | $ | 2,641,799 | ||||
Inventory Breakdown | ||||||||
Homes under construction | $ | 289,985 | $ | 338,971 | ||||
Development projects in progress | 559,373 | 618,252 | ||||||
Land held for future development | 415,309 | 407,320 | ||||||
Land held for sale | 59,922 | 85,736 | ||||||
Model homes | 72,592 | 94,727 | ||||||
Consolidated inventory not owned | 58,542 | 106,655 | ||||||
$ | 1,455,723 | $ | 1,651,661 | |||||
BEAZER HOMES USA, INC. | ||||||||||
CONSOLIDATED OPERATING AND FINANCIAL DATA - CONTINUING OPERATIONS | ||||||||||
(Dollars in thousands) | ||||||||||
OPERATING DATA | ||||||||||
Quarter Ended | Nine Months Ended | |||||||||
June 30, | June 30, | |||||||||
SELECTED OPERATING DATA | 2009 | 2008 | 2009 | 2008 | ||||||
Closings: | ||||||||||
West region | 398 | 599 | 1,176 | 1,739 | ||||||
East region | 368 | 516 | 913 | 1,672 | ||||||
Southeast region | 182 | 304 | 556 | 1,060 | ||||||
Other homebuilding | 2 | 258 | 57 | 780 | ||||||
Total closings | 950 | 1,677 | 2,702 | 5,251 | ||||||
New orders, net of cancellations: | ||||||||||
West region | 670 | 813 | 1,434 | 2,059 | ||||||
East region | 599 | 386 | 1,238 | 1,255 | ||||||
Southeast region | 267 | 417 | 521 | 1,101 | ||||||
Other homebuilding | 1 | 158 | 18 | 567 | ||||||
Total new orders | 1,537 | 1,774 | 3,211 | 4,982 | ||||||
Backlog units at end of period: | ||||||||||
West region | 785 | 1,125 | ||||||||
East region | 810 | 900 | ||||||||
Southeast region | 271 | 531 | ||||||||
Other homebuilding | 1 | 160 | ||||||||
Total backlog units | 1,867 | 2,716 | ||||||||
Dollar value of backlog at end of period | $ | 430,807 | $ | 668,147 | ||||||
BEAZER HOMES USA, INC. | ||||||||
CONSOLIDATED OPERATING AND FINANCIAL DATA - CONTINUING OPERATIONS | ||||||||
(Dollars in thousands) | ||||||||
Quarter Ended | Nine Months Ended | |||||||
June 30, | June 30, | |||||||
SUPPLEMENTAL FINANCIAL DATA | 2009 | 2008 | 2009 | 2008 | ||||
Revenues | ||||||||
Homebuilding operations | $ 223,219 | $ 431,723 | $ 641,087 |
$1,324,166 |
||||
Land and lot sales | 1,077 | 22,975 | 3,096 | 34,544 | ||||
Financial Services | 357 | 880 | 1,157 | 2,939 | ||||
Total revenues | $ 224,653 | $ 455,578 | $ 645,340 |
$1,361,649 |
||||
Gross profit (loss) | ||||||||
Homebuilding operations | $ 5,168 | (50,338) | $ (13,122) | (317,398) | ||||
Land and lot sales | 96 | 2,042 | 65 | 1,002 | ||||
Financial Services | 357 | 880 | 1,157 | 2,939 | ||||
Total gross profit (loss) | $ 5,621 | $ (47,416) | $ (11,900) | $(313,457) | ||||
Selling, general and administrative | ||||||||
Homebuilding operations | $ 51,172 | $ 82,847 | $ 173,676 | $ 243,790 | ||||
Financial Services | 185 | 670 | 920 | 1,906 | ||||
Total selling, general and administrative | $ 51,357 | $ 83,517 | $ 174,596 | $ 245,696 | ||||
SELECTED SEGMENT INFORMATION | ||||||||
Revenue: | ||||||||
West region | $ 87,328 | $ 144,913 | $ 264,428 | $ 437,369 | ||||
East region | 95,043 | 161,241 | 240,029 | 472,507 | ||||
Southeast region | 41,343 | 69,516 | 123,250 | 250,903 | ||||
Other homebuilding | 582 | 79,028 | 16,476 | 197,931 | ||||
Financial services | 357 | 880 | 1,157 | 2,939 | ||||
Total revenue |
$ 224,653 |
$ 455,578 | $ 645,340 |
$1,361,649 |
||||
Operating (loss) income | ||||||||
West region | $ (6,467) | $ (37,572) | $ (33,147) | $(140,550) | ||||
East region | (923) | (3,632) | (14,760) | (63,026) | ||||
Southeast region | (3,877) | (14,475) | (20,546) | (88,621) | ||||
Other homebuilding | (1,931) | (21,358) | (12,730) | (111,825) | ||||
Financial services | 172 | 202 | 228 | 1,012 | ||||
Segment operating loss | (13,026) | (76,835) | (80,955) | (403,010) | ||||
Corporate and unallocated | (37,667) | (64,509) | (134,763) | (226,863) | ||||
Total operating loss | $ (50,693) | $ (141,344) |
$(215,718) |
$(629,873) | ||||
Source:
Beazer Homes USA, Inc.
Leslie H. Kratcoski, 770-829-3700
Vice
President, Investor Relations & Corporate Communications
lkratcos@beazer.com