Beazer Homes Announces All-Time Record Quarterly EPS of $2.59, Up 25% Over June 2001
* All-time record quarterly diluted EPS: $2.59 (up 25% vs. $2.07 in prior
year)
* Home closings: 3,960 (up 74%); total revenues $744 million (up 66%)
* Operating profit margin: 7.2% (up 10 basis points)
* Earnings before interest, taxes, depreciation and amortization
(EBITDA): $72.6 million (up 68%)
* EBITDA Margin: 9.8% (up 10 basis points)
* Net income: $34.6 million (up 81%)
* Debt to total capitalization: 50% (down from 54% at June 30, 2001)
* Equity book value: $745.8 million (up 131%) or $55.71 per share (up
59%)
* Diluted shares outstanding: 13.4 million (up 45%)
* All-time record quarterly new orders: 4,227 (up 47%)
* All-time record backlog 7,627 homes (up 65%), sales value $1.4 billion
(up 62%)
All-Time Record EPS For June Quarter
Ian J. McCarthy, President and Chief Executive Officer of Beazer Homes, said, "We are extremely pleased to announce all-time record results for the quarter ended June 30, 2002, our first quarter including Crossmann Communities. These results demonstrate the growth and improved profitability that we expect to achieve both from this acquisition and from the expansion of our existing Beazer operations."
Mr. McCarthy continued, "All-time record EPS of $2.59 for the quarter ended June 30, 2002, was up 25% over EPS in June 2001 (up 20% over EPS before an extraordinary loss for early extinguishment of debt in the June 2001 quarter). This increase in EPS was achieved on a 45% higher diluted share count, which includes the shares issued in connection with the Crossmann acquisition."
Increased New Orders and Record Backlog Demonstrate Continued Strong
Demand
Mr. McCarthy said, "During the June quarter we had 4,227 new orders for homes, a 47% increase over the June 2001 quarter. New orders for the quarter include 1,299 new orders from Crossmann operations. Excluding Crossmann, Beazer's new orders for the quarter would have been 2,928, setting a new June quarter record. New orders for Beazer's existing operations would have been up 2% over June 2001, which was a very strong quarter when new orders were up 31% over June 2000."
Mr. McCarthy also said, "At June 30, 2002, we had 7,627 homes in backlog (up 65%) with a sales value of $1.4 billion (up 62%), both all-time Company records. We believe that our record new orders and backlog demonstrate the continued strength of the U.S. housing market. Demand remains strong, especially in the first-time homebuyer segment. In addition, the inventory of homes available for sale in the U.S. remains near all-time lows, especially in lower price points. We continue to believe that the most significant factors supporting housing activity over the coming years will be strong demand, driven by population growth, along with a supply of housing constrained by land restrictions. Such land restrictions favor larger homebuilders and are accelerating consolidation in the industry."
Operating Profit Margin Improves
David S. Weiss, Executive Vice President and Chief Financial Officer, said, "Our results for the June quarter demonstrate the continuing improvement that we are achieving in our profitability. Our operating profit margin increased 10 basis points relative to last year's June quarter, as did our margin of earnings before interest, taxes, depreciation, and amortization (EBITDA). This improvement takes into account a $10.8 million negative impact (1.5% of total revenues) of purchase accounting adjustments related to the Crossmann acquisition. These purchase accounting adjustments are included as a reduction to gross margin during the June 2002 quarter and reflect principally the write-up of homes under construction to fair value."
Mr. Weiss continued, "Our operating profit margin, including the impact of Crossmann purchase accounting adjustments, was 7.2%, up 10 basis points from the year ago June quarter. As the impact of purchase accounting diminishes over the next two quarters, we expect to report significant year-over-year increases in our operating profit margin. These increases reflect our continued ability to raise prices in many communities while our costs remain stable, along with the higher profitability that we expect from our combination with Crossmann Communities."
Beazer's Financial Position Strengthens in June Quarter
Mr. Weiss also said, "We ended our June quarter in an extremely strong financial position. At June 30, 2002, our ratio of debt to total capitalization was 50%, an improvement from the 54% level at June 30, 2001. Interest coverage (EBITDA divided by interest incurred) for the last twelve months was 5.1 times, compared to 4.4 times a year ago. We have improved our financial statistics while completing a major acquisition. This reflects our commitment to maintaining a strong balance sheet and conservative financial position. Recognizing this commitment, Standard & Poor's upgraded our senior debt from BB- to BB during the quarter."
Mr. Weiss concluded, "We expect our financial position to improve further during our fourth fiscal quarter and expect to end our fiscal year at September 30 with a debt to total capitalization ratio below 50%."
Beazer Sets Target For 2003 Earnings
Mr. McCarthy said, "The integration of Crossmann Communities and Beazer Homes is proceeding extremely well, as demonstrated by our strong operating results for the June quarter. We expect the benefits of this acquisition to accelerate over the coming year and we target achieving profit margin improvement in fiscal 2003 relative to 2002."
Mr. McCarthy concluded, "Given our strong profitability, increased level of backlog and prospects for future growth, we are now able to both raise our target for earnings per share in fiscal 2002 and establish a target for significant growth in fiscal 2003. Our target for earnings in fiscal 2002 is now $10.25 per share, up from our prior guidance of $10.00 per share. Recognizing both continuing growth in our current operations as well as accretion from our Crossmann acquisition, we are establishing a target of $12.00 for EPS in fiscal 2003, up 17% from our revised target for fiscal 2002. This EPS target is based on achieving over $3 billion in revenue in fiscal 2003."
Beazer Homes USA, Inc., based in Atlanta, Georgia, is one of the country's ten largest single-family homebuilders with operations in Arizona, California, Colorado, 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.
Note: 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 and other factors described in the Company's Annual Report for the year ended September 30, 2001.
Beazer Homes USA, Inc.
Consolidated Operating And Financial Data
(Dollars in thousands, except per share amounts)
Financial Data
Quarter Ended Nine Months Ended
June 30, June 30,
2002 2001 2002 2001
Income Statement
Revenues $743,813 $448,825 $1,736,842 $1,188,172
Costs and Expenses:
Home construction
and land sales 597,706 357,071 1,391,753 948,764
Interest 12,887 8,651 28,825 22,715
Selling, general and
administrative
expenses 79,499 51,218 187,190 132,742
Operating income 53,721 31,885 129,074 83,951
Other income 3,550 780 5,782 909
Income before income
taxes and extraordinary
item 57,271 32,665 134,856 84,860
Income taxes 22,622 12,740 52,880 33,096
Net income before
extraordinary item 34,649 19,925 81,976 51,764
Extraordinary item -
loss on early
extinguishment of
debt (net of taxes
of $469) --- 733 --- 733
Net income $34,649 $19,192 $81,976 $51,031
Basic:
Net income per share
before extraordinary
item $2.76 $2.43 $8.35 $6.35
Extraordinary item --- (0.09) --- (0.09)
Net income per common
share $2.76 $2.34 $8.35 $6.26
Diluted:
Net income per share
before extraordinary
item $2.59 $2.15 $7.63 $5.67
Extraordinary item --- (0.08) --- (0.08)
Net income per
common share $2.59 $2.07 $7.63 $5.59
Weighted average shares
outstanding in thousands:
Basic 12,545 8,195 9,823 8,149
Diluted 13,388 9,250 10,742 9,124
Interest incurred $16,729 $10,306 $34,518 $26,578
Depreciation and
amortization $2,485 $2,043 $6,322 $6,171
SELECTED BALANCE SHEET DATA
June 30,
2002 2001
Cash $5,682 $11,911
Inventory 1,343,660 785,234
Goodwill 250,201 6,649
Total assets 1,736,838 872,362
Total debt 738,782 386,809
Shareholders' equity 745,814 323,070
Beazer Homes USA, Inc.
Consolidated Operating And Financial Data (Continued)
(Dollars in thousands)
Operating Data
Quarter Ended Nine Months Ended
June 30, June 30,
Selected Operating data 2002 2001 2002 2001
Closings:
Southeast region 1,350 951 2,856 2,231
West region 1,105 806 3,170 2,323
Central region 298 253 790 561
Mid-Atlantic region 347 266 1,088 877
Midwest region 860 --- 860 ---
Total closings 3,960 2,276 8,764 5,992
New orders, net of
cancellations:
Southeast region 1,387 1,006 3,438 2,914
West region 1,248 1,204 3,494 2,943
Central region 327 288 917 737
Mid-Atlantic region 337 375 1,102 1,105
Midwest region 928 --- 928 ---
Total new orders 4,227 2,873 9,879 7,699
Backlog at end of period 7,627 4,636
Dollar value at end
of period $1,447,144 $891,898
Active subdivisions:
Southeast region 181 130
West region 73 73
Central region 32 32
Mid-Atlantic region 39 41
Midwest region 133 ---
Total active subdivisions 458 276
Supplemental Financial Data
Quarter Ended Nine Months Ended
June 30, June 30,
2002 2001 2002 2001
Revenues
Home sales $732,269 $440,866 $1,709,362 $1,161,042
Land and lot sales 4,105 3,528 9,629 15,476
Mortgage origination
revenue 10,957 6,522 26,317 17,300
Intercompany
elimination -
mortgage (3,518) (2,091) (8,466) (5,646)
Total revenues $743,813 $448,825 $1,736,842 $1,188,172
Cost of home
construction and
land sales
Home sales $597,422 $355,861 $1,392,409 $942,320
Land and lot sales 3,802 3,301 7,810 12,090
Intercompany
elimination -
mortgage (3,518) (2,091) (8,466) (5,646)
Total costs of home
construction and
land sales $597,706 $357,071 $1,391,753 $948,764
Selling, general and
administrative
Homebuilding
operations $73,161 $47,636 $172,339 $123,082
Mortgage origination
operations 6,338 3,582 14,851 9,660
Total selling, general
and administrative $79,499 $51,218 $187,190 $132,742
SOURCE Beazer Homes USA, Inc.
CONTACT: David S. Weiss, Executive Vice President and Chief Financial
Officer of Beazer Homes USA, Inc., +1-404-250-3420, or dweiss@beazer.com