Beazer Homes Reports Third Quarter Fiscal 2012 Results
“I am very pleased with our third quarter results,” said
Subsequent to quarter-end, we successfully raised over
Summary results of the quarter are as follows:
Quarter Ended June 30, 2012 - Results from Continuing Operations (unless otherwise specified)
-
Total new orders: 1,555 homes, a 28.0% increase from fiscal 2011
- Cancellation rates: 24.5%, compared with 24.3% in fiscal 2011
- Total home closings: 1,109 homes, a 40.2% increase from fiscal 2011
-
Revenue:
$254.6 million , compared to$172.8 million in fiscal 2011-
Average sales price from closings:
$227.3 thousand , compared with$213.0 thousand in fiscal 2011
-
Average sales price from closings:
-
Gross profit margin: 8.3%, compared to 8.0% in fiscal 2011. These
margins were impacted by
$5.8 million and$6.9 million in fiscal 2012 and fiscal 2011, respectively, for impairments and option contract abandonments.- Homebuilding gross profit margin, excluding impairments and abandonments: 10.5%, compared to 11.1% in fiscal 2011
- Homebuilding gross profit margin, excluding impairments, abandonments and interest amortized to cost of sales: 16.7%, compared to 17.8% in fiscal 2011.
-
Net loss from continuing operations:
$(38.1) million , or a diluted loss per share of$(0.38) , including non-cash pre-tax charges of$5.8 million for inventory impairments. This compared to a loss from continuing operations in the third quarter of fiscal 2011 of$(55.8) million , or$(0.75) per share, which included non-cash pre-tax charges of$6.9 million for inventory impairments. -
Net Loss:
$(39.9) million (including a loss from discontinued operations of$(1.8) million ), compared with a net loss of$(59.1) million for fiscal 2011 (including loss from discontinued operations of$(3.4) million ) -
Total Company land and land development spending:$40.5 million , compared with$54.2 million in fiscal 2011
Nine Months Ended June 30, 2012 - Results from Continuing Operations (unless otherwise specified)
-
Total new orders: 3,791 homes, a 29.8% increase from fiscal 2011
- Cancellation rates: 26.0%, compared with 24.1% in fiscal 2011
- Total home closings: 2,820 homes, a 50.6% increase from fiscal 2011
-
Revenue:
$634.7 million , compared to$407.5 million in fiscal 2011-
Average sales price from closings:
$222.9 thousand , compared with$213.0 thousand in fiscal 2011
-
Average sales price from closings:
-
Gross profit margin: 10.0%, compared to 5.8% in fiscal 2011. These
margins were impacted by
$10.5 million and$25.3 million in fiscal 2012 and fiscal 2011, respectively, for impairments and option contract abandonments.- Homebuilding gross profit margin, excluding impairments and abandonments was 11.4% for both periods
- Homebuilding gross profit margin, excluding impairments, abandonments and interest amortized to cost of sales was 18.0% for both periods
-
Net loss from continuing operations:
$(75.2) million , or a diluted loss per share of$(0.90) , including non-cash pre-tax charges of$10.5 million for inventory impairments. This compared to a loss from continuing operations for the nine months ended in fiscal 2011 of$(157.8) million , or$(2.14) per share, which included non-cash pre-tax charges of$25.3 million for inventory impairments. -
Net Loss:
$(79.1) million (including a loss from discontinued operations of$(3.9) million ), compared with a net loss of$(161.7) million for fiscal 2011 (including loss from discontinued operations of$(3.9) million ) -
Total Company land and land development spending:$140.6 million , compared with$178.0 million in fiscal 2011
As of June 30, 2012
-
Total cash and cash equivalents:
$503.4 million , including unrestricted cash of approximately$231.6 million -
Stockholders' equity:
$179.1 million , not including$9.4 million of mandatory convertible subordinated notes, which automatically convert to common stock at maturity in 2013 -
Total backlog from continuing operations: 2,421 homes with a sales
value of
$572.8 million , compared to 1,820 homes with a sales value of$431.2 million as of June 30, 2011 - Land and lots controlled: 25,088 lots (84.2% owned), a decrease of 15.8% from June 30, 2011
Capital Raising Initiative
Subsequent to June 30, 2012, we engaged in several capital raising
transactions designed to further strengthen our balance sheet and
position us to better participate in the emerging housing recovery. We
completed underwritten public offerings of 22 million shares of Beazer
common stock at
In addition, while we believe we possess sufficient liquidity to
participate in a housing recovery, we are mindful of potential
short-term, or seasonal, requirements for enhanced liquidity that may
arise. As such, we have negotiated a commitment letter with four
financial institutions for a proposed
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 | Nine Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||
Total revenue | $ | 254,555 | $ | 172,829 | $ | 634,746 | $ | 407,497 | ||||||||||||
Home construction and land sales expenses | 227,505 | 152,124 | 560,564 | 358,413 | ||||||||||||||||
Inventory impairments and option contract abandonments | 5,819 | 6,870 | 10,492 | 25,331 | ||||||||||||||||
Gross profit | 21,231 | 13,835 | 63,690 | 23,753 | ||||||||||||||||
Commissions | 10,776 | 7,843 | 27,522 | 18,066 | ||||||||||||||||
General and administrative expenses | 27,867 | 38,571 | 82,380 | 107,142 | ||||||||||||||||
Depreciation and amortization | 3,743 | 2,660 | 9,336 | 6,627 | ||||||||||||||||
Operating loss | (21,155 | ) | (35,239 | ) | (55,548 | ) | (108,082 | ) | ||||||||||||
Equity in income (loss) of unconsolidated entities | 48 | 63 | (25 | ) | 372 | |||||||||||||||
Gain (loss) on extinguishment of debt | — | 95 | (2,747 | ) | (2,909 | ) | ||||||||||||||
Other expense, net | (16,804 | ) | (17,085 | ) | (53,342 | ) | (46,616 | ) | ||||||||||||
Loss from continuing operations before income taxes | (37,911 | ) | (52,166 | ) | (111,662 | ) | (157,235 | ) | ||||||||||||
Provision for (benefit from) income taxes | 145 | 3,589 | (36,438 | ) | 570 | |||||||||||||||
Loss from continuing operations | (38,056 | ) | (55,755 | ) | (75,224 | ) | (157,805 | ) | ||||||||||||
Loss from discontinued operations, net of tax | (1,828 | ) | (3,365 | ) | (3,869 | ) | (3,878 | ) | ||||||||||||
Net loss | $ | (39,884 | ) | $ | (59,120 | ) | $ | (79,093 | ) | $ | (161,683 | ) | ||||||||
Weighted average number of shares: | ||||||||||||||||||||
Basic and Diluted | 99,050 | 73,982 | 83,887 | 73,930 | ||||||||||||||||
Basic and diluted loss per share: | ||||||||||||||||||||
Continuing Operations | $ | (0.38 | ) | $ | (0.75 | ) | $ | (0.90 | ) | $ | (2.14 | ) | ||||||||
Discontinued operations | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.05 | ) | ||||||||
Total | $ | (0.40 | ) | $ | (0.80 | ) | $ | (0.94 | ) | $ | (2.19 | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||
Capitalized interest in inventory, beginning of period | $ | 47,242 | $ | 47,624 | $ | 45,973 | $ | 36,884 | |||||||||||||
Interest incurred | 31,235 | 32,872 | 95,950 | 98,175 | |||||||||||||||||
Capitalized interest impaired | (222 | ) | (380 | ) | (275 | ) | (1,789 | ) | |||||||||||||
Interest expense not qualified for capitalization and included as other expense | (17,233 | ) | (17,707 | ) | (55,147 | ) | (55,688 | ) | |||||||||||||
Capitalized interest amortized to house construction and land sales expenses | (15,649 | ) | (11,179 | ) | (41,128 | ) | (26,352 | ) | |||||||||||||
Capitalized interest in inventory, end of period | $ | 45,373 | $ | 51,230 | $ | 45,373 | $ | 51,230 | |||||||||||||
BEAZER HOMES USA, INC. | ||||||||||
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS | ||||||||||
(in thousands, except share and per share data) | ||||||||||
June 30, | September 30, | |||||||||
2012 | 2011 | |||||||||
ASSETS | ||||||||||
Cash and cash equivalents | $ | 231,616 | $ | 370,403 | ||||||
Restricted cash | 271,782 | 277,058 | ||||||||
Accounts receivable (net of allowance of $2,194 and $3,872, respectively) | 25,010 | 28,303 | ||||||||
Income tax receivable | 2,398 | 4,823 | ||||||||
Inventory | ||||||||||
Owned inventory | 1,186,817 | 1,192,380 | ||||||||
Land not owned under option agreements | 14,078 | 11,753 | ||||||||
Total inventory | 1,200,895 | 1,204,133 | ||||||||
Investments in unconsolidated entities | 41,587 | 9,467 | ||||||||
Deferred tax assets, net | 6,245 | 2,760 | ||||||||
Property, plant and equipment, net | 20,849 | 22,613 | ||||||||
Previously owned rental homes, net | — | 11,347 | ||||||||
Other assets | 26,366 | 46,570 | ||||||||
Total assets | $ | 1,826,748 | $ | 1,977,477 | ||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||||
Trade accounts payable | $ | 73,473 | $ | 72,695 | ||||||
Other liabilities | 125,764 | 212,187 | ||||||||
Obligations related to land not owned under option agreements | 6,029 | 5,389 | ||||||||
Total debt (net of discounts of $20,348 and $23,243, respectively) | 1,442,407 | 1,488,826 | ||||||||
Total liabilities | $ | 1,647,673 | $ | 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, 101,116,819 and 75,588,396 issued and outstanding, respectively) | 101 | 76 | ||||||||
Paid-in capital | 684,513 | 624,750 | ||||||||
Accumulated deficit | (505,539 | ) | (426,446 | ) | ||||||
Total stockholders’ equity | 179,075 | 198,380 | ||||||||
Total liabilities and stockholders’ equity | $ | 1,826,748 | $ | 1,977,477 | ||||||
Inventory Breakdown | ||||||||||
Homes under construction | $ | 316,117 | $ | 277,331 | ||||||
Development projects in progress | 384,991 | 424,055 | ||||||||
Land held for future development | 386,353 | 384,761 | ||||||||
Land held for sale | 10,852 | 12,837 | ||||||||
Capitalized interest | 45,373 | 45,973 | ||||||||
Model homes | 43,131 | 47,423 | ||||||||
Land not owned under option agreements | 14,078 | 11,753 | ||||||||
Total inventory | $ | 1,200,895 | $ | 1,204,133 | ||||||
BEAZER HOMES USA, INC. | ||||||||||||||||||||
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS | ||||||||||||||||||||
Quarter Ended | Nine Months Ended | |||||||||||||||||||
June 30, | June 30, | |||||||||||||||||||
SELECTED OPERATING DATA | 2012 | 2011 | 2012 | 2011 | ||||||||||||||||
Closings: | ||||||||||||||||||||
West region | 455 | 273 | 1,194 | 670 | ||||||||||||||||
East region | 382 | 311 | 984 | 732 | ||||||||||||||||
Southeast region | 272 | 207 | 642 | 471 | ||||||||||||||||
Continuing Operations | 1,109 | 791 | 2,820 | 1,873 | ||||||||||||||||
Discontinued Operations | 3 | 23 | 19 | 73 | ||||||||||||||||
Total closings | 1,112 | 814 | 2,839 | 1,946 | ||||||||||||||||
New orders, net of cancellations: | ||||||||||||||||||||
West region | 730 | 447 | 1,688 | 1,038 | ||||||||||||||||
East region | 486 | 466 | 1,237 | 1,203 | ||||||||||||||||
Southeast region | 339 | 302 | 866 | 680 | ||||||||||||||||
Continuing Operations | 1,555 | 1,215 | 3,791 | 2,921 | ||||||||||||||||
Discontinued Operations | 3 | 31 | 2 | 77 | ||||||||||||||||
Total new orders | 1,558 | 1,246 | 3,793 | 2,998 | ||||||||||||||||
Backlog units at end of period: | ||||||||||||||||||||
West region | 1,064 | 637 | 1,064 | 637 | ||||||||||||||||
East region | 891 | 837 | 891 | 837 | ||||||||||||||||
Southeast region | 466 | 346 | 466 | 346 | ||||||||||||||||
Continuing Operations | 2,421 | 1,820 | 2,421 | 1,820 | ||||||||||||||||
Discontinued Operations | — | 28 | — | 28 | ||||||||||||||||
Total backlog units | 2,421 | 1,848 | 2,421 | 1,848 | ||||||||||||||||
Dollar value of backlog at end of period (in millions) | $ | 572.8 | $ | 437.9 | $ | 572.8 | $ | 437.9 | ||||||||||||
Homebuilding Revenue (in thousands): | ||||||||||||||||||||
West region | $ | 97,356 | $ | 53,549 | $ | 245,420 | $ | 128,885 | ||||||||||||
East region | 98,850 | 76,226 | 255,519 | 182,367 | ||||||||||||||||
Southeast region | 55,865 | 38,669 | 127,601 | 87,635 | ||||||||||||||||
Total revenue | $ | 252,071 | $ | 168,444 | $ | 628,540 | $ | 398,887 | ||||||||||||
BEAZER HOMES USA, INC. | |||||||||||||||||||
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS | |||||||||||||||||||
(Dollars in thousands) | |||||||||||||||||||
Quarter Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||
SUPPLEMENTAL FINANCIAL DATA | 2012 | 2011 | 2012 | 2011 | |||||||||||||||
Revenues: | |||||||||||||||||||
Homebuilding | $ | 252,071 | $ | 168,444 | $ | 628,540 | $ | 398,887 | |||||||||||
Land sales and other | 2,484 | 4,385 | 6,206 | 8,610 | |||||||||||||||
Total | $ | 254,555 | $ | 172,829 | $ | 634,746 | $ | 407,497 | |||||||||||
Gross profit: | |||||||||||||||||||
Homebuilding | $ | 20,656 | $ | 11,877 | $ | 61,475 | $ | 20,127 | |||||||||||
Land sales and other | 575 | 1,958 | 2,215 | 3,626 | |||||||||||||||
Total | $ | 21,231 | $ | 13,835 | $ | 63,690 | $ | 23,753 |
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:
Quarter Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||||||||||||||||
Homebuilding gross profit | $ | 20,656 | 8.2 | % | $ | 11,877 | 7.1 | % | $ | 61,475 | 9.8 | % | $ | 20,127 | 5.0 | % | ||||||||||||||||||
Inventory impairments and lot option abandonments (I&A) | 5,819 | 6,870 | 10,492 | 25,331 | ||||||||||||||||||||||||||||||
Homebuilding gross profit before I&A | 26,475 | 10.5 | % | 18,747 | 11.1 | % | 71,967 | 11.4 | % | 45,458 | 11.4 | % | ||||||||||||||||||||||
Interest amortized to cost of sales | 15,649 | 11,179 | 41,128 | 26,352 | ||||||||||||||||||||||||||||||
Homebuilding gross profit before I&A and interest amortized to cost of sales | 42,124 | 16.7 | % | 29,926 | 17.8 | % | 113,095 | 18.0 | % | 71,810 | 18.0 | % |
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.
Nine Months Ended June | ||||||||||||||||||||
Quarter Ended June 30, | 30, | |||||||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||||||
Net loss | $ | (39,884 | ) | $ | (59,120 | ) | $ | (79,093 | ) | $ | (161,683 | ) | ||||||||
(Benefit) provision from Income Taxes | 150 | 3,592 | (36,846 | ) | 579 | |||||||||||||||
Interest amortized to home construction and land sales expenses, capitalized interest impaired, and interest expense not qualified for capitalization | 33,104 | 29,266 | 96,550 | 83,829 | ||||||||||||||||
Depreciation and amortization and stock compensation amortization | 4,456 | 4,237 | 12,582 | 13,632 | ||||||||||||||||
Inventory impairments and option contract abandonments | 6,142 | 8,984 | 10,796 | 26,356 | ||||||||||||||||
Joint venture impairment and abandonment charges | — | 163 | 36 | 587 | ||||||||||||||||
Adjusted EBITDA | $ | 3,968 | $ | (12,878 | ) | $ | 4,025 | $ | (36,700 | ) |
Source:
Beazer Homes USA, Inc.
Jeff Hoza
Vice President and Treasurer
770-829-3700
investor.relations@beazer.com