ATLANTA, April 24 /PRNewswire Interactive News Release/ -- Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com ) today announced results for the quarter ended March 31, 2001, the second quarter of its 2001 fiscal year. Highlights of the quarter, compared to the same period of the prior year, are as follows:

• Diluted EPS: $1.92 (up 88% vs. $1.02 in prior year)

• Home closings: 1,874 (up 7%); total revenues $374 million (up 12%)

• Gross margin, before interest, on home sales: 19.2% (up 310 basis points)

• Earnings before interest, taxes, depreciation and amortization (EBITDA): $37.8 million (up 70%)

• EBITDA Margin: 10.1% (up 340 basis points)

• Net income: $17.5 million (up 98%)

• Record new orders: 3,028 (up 19%)

* Record backlog: 4,039 homes (up 25%), sales value $802 million (up 26%)

Record Earnings For March Quarter

Ian J. McCarthy, President and Chief Executive Officer of Beazer Homes, said, "We are extremely pleased to announce record second fiscal quarter earnings of $1.92 per share for March 2001, an 88% increase over last year. This increase reflects a dramatic improvement in our operating profit margin, driven by a significant increase in gross margin on home sales. The gross margin, before interest, on home sales for the quarter was 19.2%, a Company record and up 310 basis points over March 2000."

Mr. McCarthy continued, "The increase in our gross margin for the quarter reflects the continued strong demand that we have been experiencing for our homes, especially in the first-time buyer segment. As a result of this strong demand, we have been able to increase prices in most of our markets. In addition, our costs of construction have declined, both because of reduced costs for some raw materials and efficiencies that we have been able to achieve through the increased use of technology in our operations."

Record New Orders and Backlog Demonstrate Continued Strong Demand Mr. McCarthy said, "Both our new orders of 3,028 homes during the quarter and our backlog of 4,039 homes at March 31 set all-time Company records. As with our margin improvement, these records demonstrate the continued strength in demand that we are experiencing for our homes, especially in the first-time buyer segment."

Mr. McCarthy continued, "We believe that the population increases in the US over the past decade, concentrated in the South and West, will continue to fuel this strong demand. In addition, capital restrictions and land constraints have restrained the ability of smaller homebuilders to build homes to meet this demand. This has restricted the overall supply of homes in the market, leaving the number of months supply of unsold homes in the US at nearly its lowest level in the past forty years."

Mr. McCarthy also said, "The inability of smaller homebuilders to build enough homes to meet a growing demand has provided an opportunity for Beazer and other large public homebuilders to gain dramatic market share. We expect this trend to continue and possibly accelerate over the next year. We have the right product in the right location, targeted for a growing segment of the population, at a time when there is a short supply of housing available. We also have a strong balance sheet and the capital resources to take advantage of the growth that we see."

Beazer Strengthens Credit Statistics and Financial Position

David S. Weiss, Executive Vice President and Chief Financial Officer, said, "With our record results for the quarter ended March 31, 2001, our credit statistics, already among the best in the homebuilding industry, have strengthened further. For the quarter, our margin of earnings before interest, taxes, depreciation and amortization (EBITDA) to revenues was 10.1%, up 340 basis points from the prior year's March quarter. Our interest coverage, measured as EBITDA divided by interest incurred, is now 4.1 times for the last twelve months, up from 3.4 times in fiscal 2000."

Mr. Weiss continued, "While fueling the growth and improved performance that we are currently experiencing, we have continued to closely control our balance sheet. Our debt to total capitalization at March 31, 2001 was 53%, down from 56% at the end of the March 2000 quarter. We expect this leverage to further decrease by the end of our September 2001 fiscal year."

Mr. Weiss explained, "One of the ways that we control our balance sheet is by continually evaluating our land holdings. With the increasing constraints in land availability, we have used our purchasing power to acquire larger tracts of land and profitably sell sections of these to other builders who offer homes at a different price point. During the March quarter, we recognized a profit of $3.1 million on land sales of $11.6 million. We will continue to use our land acquisition expertise and purchasing power to enhance our profitability and control our balance sheet through land sales. While doing so, we still intend to maintain a strong land position to fuel further growth. We currently control approximately 29,000 lots, a three and a half year supply of land, acquired at attractive prices principally over the last three years."

Mr. Weiss concluded, "In addition to reducing our overall level of leverage during the March quarter, we recently strengthened our financial position by extending the maturity on a portion of our debt. We have added $15 million ($10 million in March and $5 million in April) to the $75 million four-year term loan (now $90 million) that we closed during the December 2000 quarter with a group of banks. The proceeds of the additional term loan were used to refinance borrowings under our $250 million revolving credit facility, which had only $42 million outstanding at March 31, 2001. By adding to borrowings under the term loan, we have reduced our reliance on short term borrowings to a minimal level and increased our financial flexibility."

Outlook

Mr. McCarthy stated, "After our record March quarter, our earnings for the last twelve months are now $6.73 per share. This figure exceeds the high end of the range ($6.25 to $6.50) that we have previously indicated we expected to achieve in fiscal 2001. In addition, our record backlog gives us increased confidence in our ability to continue to report increased earnings in the remainder of fiscal 2001. As a result, we are now increasing our expectation for fiscal 2001 earnings to the range of $7.00 to $7.25 per share. We also expect to end our September 2001 fiscal year with an increased level of backlog and a higher number of active subdivisions than at the end of fiscal 2000. This should give us the ability to continue to grow earnings in fiscal 2002 as we move toward our previously stated target of $9.00 per share by fiscal 2004."

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, Pennsylvania, South Carolina, Tennessee, Texas and Virginia. Beazer Homes also provides mortgage origination, title and insurance services to its homebuyers.

                            BEAZER HOMES USA, INC.
                  CONSOLIDATED OPERATING AND FINANCIAL DATA
               (Dollars in thousands, except per share amounts)

    FINANCIAL DATA
                                         Quarter Ended      Six Months Ended
                                           March 31,           March 31,
                                        2001      2000      2001      2000
    INCOME STATEMENT
    Revenues                           $374,297  $332,961  $739,347  $641,706
    Costs and expenses:
      Home construction and land sales  296,729   275,723   591,693   531,471
      Interest                            7,066     6,072    14,064    11,595
      Selling, general and
       administrative expense            41,428    36,187    81,524    70,460
    Operating income                     29,074    14,979    52,066    28,180
    Other income/(expense)                 (375)     (510)      129    (1,388)

    Income before income taxes           28,699    14,469    52,195    26,792
    Income taxes                         11,192     5,643    20,356    10,449
    Net income                          $17,507    $8,826   $31,839   $16,343

    Net income to common shareholders:
      Basic                             $17,507    $8,826   $31,839   $16,343
      Diluted                           $17,507    $8,826   $31,839   $16,343

    Net income per share:
      Basic                               $2.15     $1.06     $3.92     $1.94
      Diluted                             $1.92     $1.02     $3.52     $1.88

    Weighted average shares
     outstanding, in thousands:
      Basic                               8,151     8,308     8,126     8,403
      Diluted                             9,132     8,619     9,038     8,710

    Interest incurred                    $8,619    $7,659   $16,272   $14,290
    Depreciation and amortization        $2,044    $1,730    $4,128    $3,493



    SELECTED BALANCE SHEET DATA             March 31,
                                         2001      2000
    Inventory                          $719,254  $611,604
    Total assets                        786,832   673,803
    Total debt                          342,121   310,000
    Shareholders' equity                302,589   242,777



                            BEAZER HOMES USA, INC.
            CONSOLIDATED OPERATING AND FINANCIAL DATA (Continued)
                            (Dollars in thousands)

OPERATING DATA

                                                              Six Months
                                              Quarter Ended      Ended
                                                 March 31,      March 31,
    SELECTED OPERATING DATA                   2001      2000   2001   2000
    Closings:
      Southeast region                         705       664  1,280  1,215
      Southwest region                         751       706  1,517  1,391
      Central region                           148       129    308    251
      Mid-Atlantic region                      270       250    611    503
    Total closings                           1,874     1,749  3,716  3,360
    New orders, net of cancellations:
      Southeast region                       1,271       990  1,908  1,527
      Southwest region                       1,035       981  1,739  1,601
      Central region                           305       200    449    288
      Mid-Atlantic region                      417       368    730    628
    Total new orders                         3,028     2,539  4,826  4,044
    Backlog at end of period                 4,039     3,242
    Dollar value of backlog at end of
     period                               $802,212  $635,328
    Active subdivisions:
      Southeast region                         127       114
      Southwest region                          68        68
      Central region                            30        25
      Mid-Atlantic region                       39        42
    Total active subdivisions                  264       249



                                           Quarter Ended     Six Months Ended
                                             March 31,           March 31,
    SUPPLEMENTAL FINANCIAL DATA:           2001      2000      2001      2000

    Revenues
      Home sales                       $359,057  $325,612  $720,176  $629,196
      Land and lot sales                 11,618     5,151    11,948     8,456
      Mortgage origination revenue        5,458     3,627    10,778     6,734
      Intercompany elimination -
       mortgage                          (1,836)   (1,429)   (3,555)   (2,680)
    Total revenues                     $374,297  $332,961  $739,347  $641,706
    Cost of home construction and land
     sales
      Home sales                       $290,039  $273,336  $586,459  $526,074
      Land and lot sales                  8,526     3,816     8,789     8,077
      Intercompany elimination -
       mortgage                          (1,836)   (1,429)   (3,555)   (2,680)
    Total costs of home construction
     and land sales                    $296,729  $275,723  $591,693  $531,471
    Selling, general and
     administrative
      Homebuilding operations           $38,329   $33,767   $75,446   $66,175
      Mortgage origination operations     3,099     2,420     6,078     4,285
    Total selling, general and
     administrative                     $41,428   $36,187   $81,524   $70,460


                    

SOURCE Beazer Homes USA, Inc.

CONTACT: David S. Weiss, Executive Vice President and Chief Financial Officer of Beazer Homes USA, Inc., 404-250-3420, or dweiss@beazer.com /