Beazer Homes Announces Record Third Fiscal Quarter EPS of $3.01, Up 16%; Results Include $0.34 Charge For Early Repayment of Debt
ATLANTA, Jul 22, 2003 /PRNewswire-FirstCall via COMTEX/ -- Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com ) today announced results for the quarter ended June 30, 2003, the third quarter of its 2003 fiscal year. Highlights of the quarter, compared to the same quarter of the prior year, are as follows:
* Record Third Quarter Diluted EPS: $3.01 (up 16% vs. $2.59 in prior
year)
* Home closings: 3,616 (down 9%)
* Total revenues $772 million (up 4%)
* Gross margin (before interest): 22.4% (up 280 basis points)
* Net income: $40.7 million (up 17%)
* Debt to total capitalization: 44% (down from 50%)
* All-time record new orders: 4,734 homes (up 12%)
* All-time record backlog: 8,578 homes (up 12%), sales value $1.8 billion
(up 23%)
* Results for the quarter include $7.6 million charge ($4.6 million
after-tax or $0.34 per share) for early repayment of debt
Record Earnings for Third Quarter of Fiscal 2003
Ian J. McCarthy, President and Chief Executive Officer of Beazer Homes, said, "We are extremely pleased to announce record June quarter EPS of $3.01 and net income of $40.7 million for the third quarter of our 2003 fiscal year. This was our first full quarter in fiscal 2003 with results that are comparable to the prior year's quarter in that both include Crossmann Communities, which we acquired last April. The increases that we continue to report in earnings, new orders and backlog illustrate the organic growth that we are achieving."
Mr. McCarthy continued, "The growth in our new orders and backlog were especially impressive during the quarter, with new orders up 12% over last year's June quarter and the dollar value of our backlog up 23% as of the end of June, both setting new all-time company records. These increases were achieved on an increase of 7% in our number of active subdivisions during the quarter relative to the same quarter of the prior year. Our increasing sales velocity and the strength of our backlog are the best leading indicators of future growth in earnings."
Strong Financial Position
David S. Weiss, Executive Vice President and Chief Financial Officer, said, "We ended the June 2003 quarter with one of our strongest balance sheets ever. Our ratio of debt to total capitalization improved from 50% to 44% relative to the June quarter of the prior year. This performance demonstrates how we have both grown the business and generated positive cash flow from operations over the past year."
Mr. Weiss also said, "During the quarter we further improved our financial position by renegotiating and extending the term on our $250 million revolving credit facility and our $200 million four-year term loan, which we increased from our prior $100 million term loan. The proceeds from the increase in our term loan were used to retire our $100 million 8-7/8% Senior Notes due in 2008. This refinancing will result in interest savings of $6 million per year, based upon current interest rates. The early retirement of our debt resulted in a one-time charge of $7.6 million ($0.34 per share after-tax) to reflect the costs of retiring our debt including the write-off of previously capitalized fees."
Beazer Increases Target EPS Range for Fiscal 2003
Mr. McCarthy concluded, "With our record performance during the June quarter and our dollar backlog up 23% we now feel optimistic in our prospects for exceeding our prior earnings per share target of $12.25 for fiscal 2003. As a result, we are now raising our EPS target to a range of $12.25 to $12.50 per share, including the $0.34 charge that we recorded this quarter for the early retirement of our debt. This new target range represents 14% to 16% growth over fiscal 2002."
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, Delaware, 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.
Notes
Forward-Looking Statements:
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, 2002.
Non-GAAP Financial Measures:
EBITDA is not a generally accepted accounting principle (GAAP) financial measure. EBITDA is calculated by adding to net income the provision for income tax, depreciation, amortization and interest. EBITDA should not be considered an alternative to net income determined in accordance with GAAP as an indicator of operating performance, nor an alternative to cash flows from operating activities determined in accordance with GAAP as a measure of liquidity. Because some analysts and companies may not calculate EBITDA in the same manner as Beazer, the EBITDA information presented above may not be comparable to similar presentations by others. Beazer's management believes that EBITDA reflects the changes in the Company's operating results, particularly changes in the Company's net income, and is an indication of Beazer's ability to generate funds from operations that are available to pay income taxes, interest and principal on debt and to meet other cash obligations. A reconciliation of EBITDA to net income, the most directly comparable GAAP measure, is provided below:
Quarter Ended
June 30,
2003 2002
Reconciliation of Net Income to EBITDA
Net Income $40,689 $34,649
Add:
Income taxes 26,566 22,622
Interest 14,049 12,887
Depreciation and amortization 3,914 2,485
EBITDA $85,218 $72,643
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,
2003 2002 2003 2002
INCOME STATEMENT
Revenues $771,758 $743,813 $2,137,485 $1,736,842
Costs and expenses:
Home construction and land
sales 598,553 597,706 1,665,903 1,391,753
Interest 14,049 12,887 38,149 28,825
Selling, general and
administrative expense 85,618 79,499 239,342 187,190
Expenses related to early
retirement of debt 7,570 --- 7,570 ---
Operating income 65,968 53,721 186,521 129,074
Other income 1,287 3,550 4,523 5,782
Income before income taxes 67,255 57,271 191,044 134,856
Income taxes 26,566 22,622 75,463 52,880
Net income $40,689 $34,649 $115,581 $81,976
Net income per common share:
Basic $3.16 $2.76 $9.01 $8.35
Diluted $3.01 $2.59 $8.59 $7.63
Weighted average shares
outstanding, in thousands:
Basic 12,857 12,545 12,828 9,823
Diluted 13,530 13,388 13,454 10,742
Interest incurred $16,120 $16,729 $49,618 $34,518
Depreciation and amortization $3,914 $2,485 $9,597 $6,322
SELECTED BALANCE SHEET DATA June 30,
2003 2002
Cash $15,356 $5,682
Inventory 1,654,356 1,343,660
Total assets 2,040,773 1,736,838
Total debt 741,104 738,782
Shareholders' equity 925,966 745,814
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 2003 2002 2003 2002
Closings:
Southeast region 1,204 1,350 3,390 2,856
West region 1,174 1,105 3,309 3,170
Central region 296 298 834 790
Mid-Atlantic region 261 347 789 1,088
Midwest region 681 860 2,073 860
Total closings 3,616 3,960 10,395 8,764
New orders, net of cancellations:
Southeast region 1,673 1,387 4,316 3,438
West region 1,474 1,248 3,690 3,494
Central region 332 327 860 917
Mid-Atlantic region 434 337 1,382 1,102
Midwest region 821 928 2,206 928
Total new orders 4,734 4,227 12,454 9,879
Backlog at end of period 8,578 7,627
Dollar value of backlog at end of
period $1,781,936 $1,447,144
Active subdivisions:
Southeast region 187 181
West region 86 73
Central region 42 32
Mid-Atlantic region 39 39
Midwest region 135 133
Total active subdivisions 489 458
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA (Continued)
(Dollars in thousands)
Quarter Ended Nine Months Ended
June 30, June 30,
SUPPLEMENTAL FINANCIAL DATA: 2003 2002 2003 2002
Revenues
Home sales $745,221 $732,269 $2,089,605 $1,709,362
Land and lot sales 16,466 4,105 19,803 9,629
Mortgage origination
revenue 14,941 10,957 40,351 26,317
Intercompany elimination -
mortgage (4,870) (3,518) (12,274) (8,466)
Total revenues $771,758 $743,813 $2,137,485 $1,736,842
Cost of home construction and
land sales
Home sales $589,500 $597,422 $1,661,605 $1,392,409
Land and lot sales 13,923 3,802 16,572 7,810
Intercompany elimination -
mortgage (4,870) (3,518) (12,274) (8,466)
Total costs of home
construction and land sales $598,553 $597,706 $1,665,903 $1,391,753
Selling, general and
administrative
Homebuilding operations $78,026 $73,161 $217,872 $172,339
Mortgage origination
operations 7,592 6,338 21,470 14,851
Total selling, general and
administrative $85,618 $79,499 $239,342 $187,190
SOURCE Beazer Homes USA, Inc.
David S. Weiss, Executive Vice President and Chief FinancialOfficer of Beazer Homes USA, Inc., +1-404-250-3420, or dweiss@beazer.com
http://www.beazer.com