ATLANTA, July 25 /PRNewswire/ -- Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com ) today announced results for the quarter ended June 30, 2000, the third quarter of its 2000 fiscal year. Highlights of the quarter, compared to the same period of the prior year, are as follows:

• Diluted EPS: $1.26 (up 10% vs. $1.15 in prior year's June quarter)

• Home closings: 1,979 (up 1%); total revenues $390 million (up 5%)

• Gross profit margin, before interest: 18.1% (up 80 basis points)

• Operating income: $20.9 million (up 23%)

• Operating income margin: 5.4% (up 80 basis points)

• Other expense includes $3.3 million pre-tax charge ($.24 per share, after-tax) for wind down of Premier Communities

• Net income: $10.6 million (up 3%)

• New orders: 2,190 (up 3%), a June quarter record

• Backlog: 3,453 homes (up 5%), sales value $679 million (up 11%), both all-time Company records

Record Third Quarter Earnings, New Orders and Backlog

Ian McCarthy, President and Chief Executive Officer of Beazer Homes, said, "We are pleased to announce record earnings for the quarter ended June 30, 2000. We are also extremely pleased to report that our sales and our backlog continue to increase, setting new Company records and demonstrating the growth that we expect to continue into fiscal 2001."

Mr. McCarthy continued, "A major driver of our increased earnings during the quarter was an improved gross profit margin. Gross profit, before interest, was 18.1% of revenues, up 80 basis points from last year's June quarter. This improved profit margin results, in part, from significant increases we have had in revenues from options chosen by homebuyers through our design centers. Profit margins on options are approximately double that of our base homebuilding business."

Mr. McCarthy also said, "During the June quarter our new orders increased by 3%, even though we entered the quarter with a lower number of active subdivisions than at the beginning of last year's June quarter and ended the quarter with our subdivision count up only 1% over June 30, 1999. We now have an all-time record 3,453 homes in backlog, with a record dollar value of $679 million, up 11% over last year. Clearly our business is still very strong."

Earnings Include $3.3 Million ($.24 per share) Charge For Wind-Down of

Premier Communities

Earnings for the June 2000 quarter include a $3.3 million pre-tax charge ($.24 per share, after tax) for the expected costs of winding down Premier Communities, the Company's joint venture in affordable housing.

Mr. McCarthy said, "While we continue to believe in the prospects for affordable housing in the United States, our joint venture has not progressed as originally projected. As a result, the partners of the joint venture have decided to discontinue the venture. The venture has shut down its Houston operations and is in the process of winding down its operations in El Paso. In connection with this, we have included in other expense a charge of $3.3 million to reflect our share of the expected future costs of winding down the venture. We currently do not expect to record further charges relating to the winding down of the venture in the future."

Strong Land Position

David S. Weiss, Executive Vice President and Chief Financial Officer of Beazer Homes, said, "With our backlog hitting new records and developed land becoming an increasingly scarce resource, it is extremely important that we have a strong land bank. I am pleased to report that we currently control the best supply of land that we have ever had. Currently we control approximately 27,000 lots, 46% owned and 54% under option. This represents a 3.5 year supply based on the last twelve months' closings. We have obtained this land position over the past few years at very attractive prices, relative to today's value. Based on this land position, and the profit on homes in our backlog, we believe that our book value of $30.13 per share significantly understates the fair value of our net assets."

Mr. Weiss also said, "During the June quarter we realized $2.1 million of profit on $7.1 million of land sales. This profit indicates the magnitude of the unrealized gain on much of the land carried on our books. Most of the land sold during the quarter is in areas where smaller tracts of developed lots are in short supply and we have used our buying power to control a large supply at an attractive price. In these cases, we will sell land to other builders, retaining a sufficient supply for our own operations. We intend to continue to periodically sell land where it makes strategic and economic sense."

Mr. Weiss concluded, "Even with our improved land holdings, we continue to maintain a very strong financial position. At 56%, our debt to total capitalization is at the same level that it was a year ago. We expect that level to come down in September as we close our fiscal year."

Beazer, Industry Leader in E-Commerce, Expects Continued Growth in 2001 Mr. McCarthy said, "During the June quarter we announced progress on a number of aspects of our e-commerce initiative, "Clicks and Sticks". We signed a national marketing agreement with Homebuilder.com. We became the first national builder to sign up for the BuildNet E-Building Exchange and we signed an agreement with BuildNet (www.buildnet.com) to jointly develop an internet- enabled version of their sales office automation system, True Sell. We also retained Cambridge Technology Partners to help us develop the prototype of MyBeazerHome.com, which we expect to unveil by the end of this calendar year. These initiatives demonstrate our intention to be the leader in revolutionizing the way the homebuilding industry embraces e-commerce."

Mr. McCarthy concluded, "Fiscal 2000 is shaping up to be another record year for Beazer Homes. Earnings per share of $4.70 for the last twelve months already exceeds last fiscal year's EPS by 13%. With our current higher level of backlog, we expect our fourth fiscal quarter to add to this increase. In addition, our increasing order trend, strong land bank and increased backlog all give us good confidence about the prospects for continued increased earnings in fiscal 2001."

Beazer Homes USA, Inc., based in Atlanta, Georgia, is one of the country's ten largest single-family homebuilders with operations in Arizona, California, Florida, Georgia, Maryland, Nevada, New Jersey, North Carolina, South Carolina, Tennessee, Texas and Virginia.

                              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,
                            2000          1999         2000          1999
    INCOME STATEMENT
    Revenues              $389,557      $370,431   $1,031,263      $939,885
    Costs and expenses:
     Home construction
      and land sales       318,912       306,424      850,385       779,632
     Interest                7,252         6,472       18,847        17,769
     Selling, general
      and administrative
      expense               42,450        40,571      112,911       104,689
    Operating income        20,943        16,964       49,120        37,795
    Other expense           (3,608)         (294)      (4,994)         (364)

    Income before
     income taxes           17,335        16,670       44,126        37,431
    Income taxes             6,761         6,418       17,209        14,410
    Net income             $10,574       $10,252      $26,917       $23,021

    Dividends and other
     payments to preferred
     shareholders             $---           $36         $---        $3,343
    Net income to
     common shareholders:
     Basic                 $10,574       $10,216      $26,917       $19,678
     Diluted               $10,574       $10,252      $26,917       $23,021

    Net income per share:
     Basic                   $1.31         $1.23        $3.24         $2.85
     Diluted                 $1.26         $1.15        $3.12         $2.58

    Weighted average
     shares outstanding,
     in thousands:
     Basic                   8,088         8,285        8,310         6,908
     Diluted                 8,412         8,919        8,622         8,922

    Interest incurred       $8,316        $6,962      $22,606       $19,981
    Depreciation and
     amortization           $1,666        $1,388       $5,159        $3,449

    SELECTED BALANCE SHEET DATA
                                  June 30,
                            2000          1999
    Inventory             $669,787      $563,059
    Total assets           725,969       622,594
    Total debt             325,000       277,000
    Shareholders' equity   253,414       219,766


                              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   2000          1999         2000          1999
    Closings:
     Southeast region          763           796        1,978         2,039
     Southwest region          752           734        2,143         2,054
     Central region            153           163          404           427
     Mid-Atlantic region       311           268          814           638
    Total closings           1,979         1,961        5,339         5,158
    New orders, net
     of cancellations:
     Southeast region          705           880        2,232         2,435
     Southwest region          939           778        2,540         2,254
     Central region            241           147          529           355
     Mid-Atlantic region       305           329          933           797
    Total new orders         2,190         2,134        6,234        5,841(A)
    Backlog at end of period 3,453         3,295
     Dollar value of backlog
      at end of period    $678,836      $612,552
    Active subdivisions:
     Southeast region          115           112
     Southwest region           74            68
     Central region             24            28
     Mid-Atlantic region        39            42
    Total active subdivisions  252           250

    SUPPLEMENTAL FINANCIAL DATA:
                                Quarter Ended            Nine Months Ended
                                   June 30,                  June 30,
                             2000          1999        2000           1999
    Revenues
     Home sales           $379,624      $365,481   $1,008,820      $930,521
     Land and lot sales      7,146         3,553       15,602         4,555
     Mortgage origination
      revenue                4,551         3,467       11,285         9,829
     Intercompany elimination -
      mortgage              (1,764)       (2,070)      (4,444)       (5,020)
    Total revenues        $389,557      $370,431   $1,031,263      $939,885
    Cost of home construction
     and land sales
     Home sales           $315,642      $305,521     $842,829      $780,874
     Land and lot sales      5,034         2,973       12,000         3,778
     Intercompany elimination -
      mortgage              (1,764)       (2,070)      (4,444)       (5,020)
    Total costs of home
     construction and
     land sales           $318,912      $306,424     $850,385      $779,632
    Selling, general and
     administrative
     Homebuilding
      operations           $39,760       $38,437     $105,936       $98,728
     Mortgage origination
      operations             2,690         2,134        6,975         5,961
    Total selling, general
     and administrative    $42,450       $40,571     $112,911      $104,689