Beazer Homes Closes Out Fiscal 2013 with $11.9 Million of Net Income for the Fourth Quarter and 21.4% Homebuilding Gross Margins
The Company closed out its fiscal year with improved fourth quarter
results highlighted by positive net income of
For the full year fiscal 2013, the Company made significant progress on
its objective to return to sustainable profitability. The Company’s net
loss for fiscal 2013 was
“We finished 2013 with solidly improved operating and financial
results,” said
“With this positive momentum heading into fiscal 2014 as well as our continued belief that new home affordability and inventory levels will remain favorable, we expect to report a full year of profitability for fiscal 2014.”
Q4 Results from Continuing Operations (unless otherwise specified)
Quarter Ended September 30, | ||||||||||||
2013 | 2012 | Change | ||||||||||
New Home Orders | 1,192 | 1,110 | 7.4 | % | ||||||||
Average community count | 135 | 163 | (17.2 | )% | ||||||||
QTD orders per month per community | 3.0 | 2.3 | 30.4 | % | ||||||||
Cancellation rates | 23.9 | % | 31.1 | % | -720 bps | |||||||
Total Home Closings | 1,657 | 1,608 | 3.0 | % | ||||||||
Average sales price from closings (in thousands) | $ | 263.2 | $ | 228.6 | 15.1 | % | ||||||
Homebuilding revenue (in millions) | $ | 436.2 | $ | 367.5 | 18.7 | % | ||||||
Homebuilding gross profit margin, excluding impairments and abandonments (I&A) | 18.3 | % | 11.8 | % | 650 bps | |||||||
Homebuilding gross profit margin, excluding I&A and interest amortized to cost of sales | 21.4 | % | 17.2 | % | 420 bps | |||||||
Income (loss) from continuing operations before income taxes (in millions) | $ | 8.9 | $ | (64.3 | ) | $ | 73.2 | |||||
Benefit from income taxes (in millions) | $ | 2.5 | $ | 3.9 | $ | (1.4 | ) | |||||
Net income (loss) from continuing operations (in millions) | $ | 11.3 | $ | (60.4 | ) | $ | 71.7 | |||||
Basic Income (Loss) Per Share | $ | 0.46 | $ | (2.57 | ) | $ | 3.03 | |||||
Diluted Income (Loss) Per Share | $ | 0.36 | $ | (2.57 | ) | $ | 2.93 | |||||
Loss on debt extinguishment (in millions) | $ | (1.0 | ) | $ | (42.4 | ) | $ | 41.4 | ||||
Inventory impairments (in millions) | $ | (0.4 | ) | $ | (1.7 | ) | $ | 1.3 | ||||
Net income (loss) from continuing operations excluding loss on debt extinguishment and inventory impairments (in millions) | $ | 12.7 | $ | (16.3 | ) | $ | 29.0 | |||||
Land and land development spending (in millions) | $ | 160.8 | $ | 45.0 | $ | 115.8 | ||||||
Total Company Adjusted EBITDA (in millions) | $ | 41.5 | $ | 15.1 | $ | 26.4 | ||||||
Full Year Results from Continuing Operations (unless otherwise specified)
Year Ended September 30, | ||||||||||||
2013 | 2012 | Change | ||||||||||
New Home Orders | 5,026 | 4,901 | 2.6 | % | ||||||||
Average community count | 145 | 178 | (18.5 | )% | ||||||||
LTM orders per month per community | 2.9 | 2.3 | 26.1 | % | ||||||||
Cancellation rates | 21.8 | % | 27.2 | % | -540 bps | |||||||
Total Home Closings | 5,056 | 4,428 | 14.2 | % | ||||||||
Average sales price from closings (in thousands) | $ | 253.0 | $ | 224.9 | 12.5 | % | ||||||
Homebuilding revenue (in millions) | $ | 1,279.2 | $ | 996.1 | 28.4 | % | ||||||
Homebuilding gross profit margin, excluding impairments and abandonments | 16.8 | % | 11.6 | % | 520 bps | |||||||
Homebuilding gross profit margin, excluding impairments, abandonments and interest amortized to cost of sales | 20.0 | % | 17.7 | % | 230 bps | |||||||
Loss from continuing operations before income taxes (in millions) | $ | (35.7 | ) | $ | (176.0 | ) | $ | 140.3 | ||||
Benefit from income taxes (in millions) | $ | 3.5 | $ | 40.3 | $ | (36.8 | ) | |||||
Net loss from continuing operations (in millions) | $ | (32.2 | ) | $ | (135.6 | ) | $ | 103.4 | ||||
Basic and Diluted Loss Per Share | $ | (1.30 | ) | $ | (7.34 | ) | $ | 6.04 | ||||
Loss on debt extinguishment (in millions) | $ | (4.6 | ) | $ | (45.1 | ) | $ | 40.5 | ||||
Inventory impairments (in millions) | $ | (2.6 | ) | $ | (12.2 | ) | $ | 9.6 | ||||
Net loss from continuing operations excluding loss on debt extinguishment and inventory impairments (in millions) | $ | (25.0 | ) | $ | (78.3 | ) | $ | 53.3 | ||||
Land and land development spending (in millions) | $ | 475.2 | $ | 185.5 | $ | 289.7 | ||||||
Adjusted EBITDA (in millions) | $ | 86.3 | $ | 21.8 | $ | 64.5 | ||||||
As of September 30, 2013
-
Total cash and cash equivalents:
$553.4 million , including unrestricted cash of approximately$504.5 million -
Stockholders' equity:
$240.6 million -
Total backlog from continuing operations: 1,893 homes with a sales
value of
$528.1 million , compared to 1,923 homes with a sales value of$479.1 million as of September 30, 2012 - Land and lots controlled: 28,004 lots (79.4% owned), an increase of 16.0% from September 30, 2012
Capital Markets Activity
During the year ended September 30, 2013, we engaged in several capital
raising transactions designed to further strengthen our balance sheet
and provide additional capital for land acquisitions and development. In
Conference Call
The Company will hold a conference call on
Headquartered in
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 availability and cost of land and the risks associated with the future value of our inventory such as additional asset impairment charges or writedowns; (ii) economic changes nationally or in local markets, including changes in consumer confidence, declines in employment levels, inflation and increases in the quantity and decreases in the price of new homes and resale homes in the market; (iii) the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; (iv) 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; (v) shortages of or increased prices for labor, land or raw materials used in housing production; (vi) 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; (vii) our ability to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing; (viii) a substantial increase in mortgage interest rates, increased disruption in the availability of mortgage financing, a change in tax laws regarding the deductibility of mortgage interest, or an increased number of foreclosures; (ix) increased competition or delays in reacting to changing consumer preference in home design; (x) factors affecting margins such as decreased land values underlying land option agreements, increased land development costs on communities under development or delays or difficulties in implementing initiatives to reduce production and overhead cost structure; (xi) estimates related to the potential recoverability of our deferred tax assets; (xii) potential delays or increased costs in obtaining necessary permits as a result of changes to, or complying with, laws, regulations, or governmental policies and possible penalties for failure to comply with such laws, regulations and governmental policies; (xiii) the results of litigation or government proceedings and fulfillment of the obligations in the Deferred Prosecution Agreement and consent orders with governmental authorities and other settlement agreements; (xiv) the impact of construction defect and home warranty claims; (xv) the cost and availability of insurance and surety bonds; (xvi) the performance of our unconsolidated entities and our unconsolidated entity partners; (xvii) delays in land development or home construction resulting from adverse weather conditions; (xviii) the impact of information technology failures or data security breaches; (xix) effects of changes in accounting policies, standards, guidelines or principles; or (xx) terrorist acts, acts of war and other factors over which the Company has little or no control.
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. |
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UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS |
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(in thousands, except per share data) |
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Three Months Ended | Fiscal Year Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Total revenue | $ | 438,334 | $ | 370,931 | $ | 1,287,577 | $ | 1,005,677 | |||||||||||
Home construction and land sales expenses | 357,884 | 327,815 | 1,070,814 | 888,379 | |||||||||||||||
Inventory impairments and option contract abandonments | 404 | 1,718 | 2,633 | 12,210 | |||||||||||||||
Gross profit | 80,046 | 41,398 | 214,130 | 105,088 | |||||||||||||||
Commissions | 17,516 | 16,063 | 52,922 | 43,585 | |||||||||||||||
General and administrative expenses | 36,428 | 27,671 | 121,163 | 110,051 | |||||||||||||||
Depreciation and amortization | 4,023 | 4,174 | 12,784 | 13,510 | |||||||||||||||
Operating income (loss) | 22,079 | (6,510 | ) | 27,261 | (62,058 | ) | |||||||||||||
Equity in income (loss) of unconsolidated entities | 93 | 329 | (113 | ) | 304 | ||||||||||||||
Loss on extinguishment of debt | (998 | ) | (42,350 | ) | (4,636 | ) | (45,097 | ) | |||||||||||
Other expense, net | (12,307 | ) | (15,777 | ) | (58,165 | ) | (69,119 | ) | |||||||||||
Income (loss) from continuing operations before income taxes | 8,867 | (64,308 | ) | (35,653 | ) | (175,970 | ) | ||||||||||||
Benefit from income taxes | (2,461 | ) | (3,909 | ) | (3,489 | ) | (40,347 | ) | |||||||||||
Income (loss) from continuing operations | 11,328 | (60,399 | ) | (32,164 | ) | (135,623 | ) | ||||||||||||
Income (loss) from discontinued operations, net of tax | 620 | (5,834 | ) | (1,704 | ) | (9,703 | ) | ||||||||||||
Net income (loss) | $ | 11,948 | $ | (66,233 | ) | $ | (33,868 | ) | $ | (145,326 | ) | ||||||||
Weighted average number of shares: | |||||||||||||||||||
Basic | 24,888 | 23,528 | 24,651 | 18,474 | |||||||||||||||
Diluted | 31,560 | 23,528 | 24,651 | 18,474 | |||||||||||||||
Income (loss) per share: | |||||||||||||||||||
Basic income (loss) per share from continuing operations | $ | 0.46 | $ | (2.57 | ) | $ | (1.30 | ) | $ | (7.34 | ) | ||||||||
Basic income (loss) per share from discontinued operations | $ | 0.02 | $ | (0.25 | ) | $ | (0.07 | ) | $ | (0.53 | ) | ||||||||
Basic income (loss) per share | $ | 0.48 | $ | (2.82 | ) | $ | (1.37 | ) | $ | (7.87 | ) | ||||||||
Diluted income (loss) per share from continuing operations | $ | 0.36 | $ | (2.57 | ) | $ | (1.30 | ) | $ | (7.34 | ) | ||||||||
Diluted income (loss) per share from discontinued operations | $ | 0.02 | $ | (0.25 | ) | $ | (0.07 | ) | $ | (0.53 | ) | ||||||||
Diluted income (loss) per share | $ | 0.38 | $ | (2.82 | ) | $ | (1.37 | ) | $ | (7.87 | ) | ||||||||
Three Months Ended | Fiscal Year Ended | ||||||||||||||||||
September 30, | September 30, | ||||||||||||||||||
2013 | 2012 | 2013 | 2012 | ||||||||||||||||
Capitalized interest in inventory, beginning of period | $ | 50,019 | $ | 45,373 | $ | 38,190 | $ | 45,973 | |||||||||||
Interest incurred | 28,715 | 28,968 | 115,076 | 124,918 | |||||||||||||||
Capitalized interest impaired | — | — | — | (275 | ) | ||||||||||||||
Interest expense not qualified for capitalization and included as other expense | (12,749 | ) | (16,327 | ) | (59,458 | ) | (71,474 | ) | |||||||||||
Capitalized interest amortized to house construction and land sales expenses | (13,423 | ) | (19,824 | ) | (41,246 | ) | (60,952 | ) | |||||||||||
Capitalized interest in inventory, end of period | $ | 52,562 | $ | 38,190 | $ | 52,562 | $ | 38,190 | |||||||||||
BEAZER HOMES USA, INC. |
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UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS |
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(in thousands, except share and per share data) |
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September 30, 2013 | September 30, 2012 | ||||||||
ASSETS | |||||||||
Cash and cash equivalents | $ | 504,459 | $ | 487,795 | |||||
Restricted cash | 48,978 | 253,260 | |||||||
Accounts receivable (net of allowance of $1,651 and $2,235, respectively) | 22,342 | 24,599 | |||||||
Income tax receivable | 2,813 | 6,372 | |||||||
Inventory | |||||||||
Owned inventory | 1,304,694 | 1,099,132 | |||||||
Land not owned under option agreements | 9,124 | 12,420 | |||||||
Total inventory | 1,313,818 | 1,111,552 | |||||||
Investments in unconsolidated entities | 44,997 | 42,078 | |||||||
Deferred tax assets, net | 5,253 | 6,848 | |||||||
Property, plant and equipment, net | 17,000 | 18,974 | |||||||
Other assets | 27,129 | 30,740 | |||||||
Total assets | $ | 1,986,789 | $ | 1,982,218 | |||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||
Trade accounts payable | $ | 83,800 | $ | 69,268 | |||||
Other liabilities | 145,623 | 147,718 | |||||||
Obligations related to land not owned under option agreements | 4,633 | 4,787 | |||||||
Total debt (net of discounts of $5,160 and $3,082, respectively) | 1,512,183 | 1,498,198 | |||||||
Total liabilities | $ | 1,746,239 | $ | 1,719,971 | |||||
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, 63,000,000 shares authorized, 25,245,945 and 24,601,830 issued and outstanding, respectively) | 25 | 25 | |||||||
Paid-in capital | 846,165 | 833,994 | |||||||
Accumulated deficit | (605,640 | ) | (571,772 | ) | |||||
Total stockholders’ equity | 240,550 | 262,247 | |||||||
Total liabilities and stockholders’ equity | $ | 1,986,789 | $ | 1,982,218 | |||||
Inventory Breakdown | |||||||||
Homes under construction | $ | 262,476 | $ | 251,828 | |||||
Development projects in progress | 578,453 | 391,019 | |||||||
Land held for future development | 341,986 | 367,102 | |||||||
Land held for sale | 31,331 | 10,149 | |||||||
Capitalized interest | 52,562 | 38,190 | |||||||
Model homes | 37,886 | 40,844 | |||||||
Land not owned under option agreements | 9,124 | 12,420 | |||||||
Total inventory | $ | 1,313,818 | $ | 1,111,552 | |||||
BEAZER HOMES USA, INC. |
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CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS |
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Quarter Ended September 30, | Fiscal Year Ended September 30, | ||||||||||||||||
SELECTED OPERATING DATA | 2013 | 2012 | 2013 | 2012 | |||||||||||||
Closings: | |||||||||||||||||
West region | 724 | 689 | 2,277 | 1,883 | |||||||||||||
East region | 523 | 522 | 1,629 | 1,506 | |||||||||||||
Southeast region | 410 | 397 | 1,150 | 1,039 | |||||||||||||
Continuing Operations | 1,657 | 1,608 | 5,056 | 4,428 | |||||||||||||
Discontinued Operations | — | — | — | 19 | |||||||||||||
Total closings | 1,657 | 1,608 | 5,056 | 4,447 | |||||||||||||
New orders, net of cancellations: | |||||||||||||||||
West region | 480 | 464 | 2,176 | 2,152 | |||||||||||||
East region | 403 | 378 | 1,543 | 1,615 | |||||||||||||
Southeast region | 309 | 268 | 1,307 | 1,134 | |||||||||||||
Continuing Operations | 1,192 | 1,110 | 5,026 | 4,901 | |||||||||||||
Discontinued Operations | — | — | — | 2 | |||||||||||||
Total new orders | 1,192 | 1,110 | 5,026 | 4,903 | |||||||||||||
Backlog units at end of period: | |||||||||||||||||
West region | 738 | 839 | 738 | 839 | |||||||||||||
East region | 661 | 747 | 661 | 747 | |||||||||||||
Southeast region | 494 | 337 | 494 | 337 | |||||||||||||
Continuing Operations | 1,893 | 1,923 | 1,893 | 1,923 | |||||||||||||
Discontinued Operations | — | — | — | — | |||||||||||||
Total backlog units | 1,893 | 1,923 | 1,893 | 1,923 | |||||||||||||
Dollar value of backlog at end of period (in millions) | $ | 528.1 | $ | 479.1 | $ | 528.1 | $ | 479.1 | |||||||||
Homebuilding Revenue (in thousands): | |||||||||||||||||
West region | $ | 183,472 | $ | 141,124 | $ | 543,524 | $ | 386,544 | |||||||||
East region | 158,134 | 146,295 | 482,468 | 401,814 | |||||||||||||
Southeast region | 94,581 | 80,100 | 253,220 | 207,701 | |||||||||||||
Total homebuilding revenue | $ | 436,187 | $ | 367,519 | $ | 1,279,212 | $ | 996,059 | |||||||||
BEAZER HOMES USA, INC. |
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CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS |
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(Dollars in thousands) |
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Quarter Ended September 30, | Fiscal Year Ended September 30, | |||||||||||||||||
SUPPLEMENTAL FINANCIAL DATA | 2013 | 2012 | 2013 | 2012 | ||||||||||||||
Revenues: | ||||||||||||||||||
Homebuilding | $ | 436,187 | $ | 367,519 | $ | 1,279,212 | $ | 996,059 | ||||||||||
Land sales and other | 2,147 | 3,412 | 8,365 | 9,618 | ||||||||||||||
Total | $ | 438,334 | $ | 370,931 | $ | 1,287,577 | $ | 1,005,677 | ||||||||||
Gross profit: | ||||||||||||||||||
Homebuilding | $ | 79,583 | $ | 41,630 | $ | 212,054 | $ | 103,105 | ||||||||||
Land sales and other | 463 | (232 | ) | 2,076 | 1,983 | |||||||||||||
Total | $ | 80,046 | $ | 41,398 | $ | 214,130 | $ | 105,088 | ||||||||||
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 September 30, | Fiscal Year Ended September 30, | |||||||||||||||||||||||||||
2013 | 2012 | 2013 | 2012 | |||||||||||||||||||||||||
Homebuilding gross profit | $ | 79,583 | 18.2 | % | $ | 41,630 | 11.3 | % | $ | 212,054 | 16.6 | % | $ | 103,105 | 10.4 | % | ||||||||||||
Inventory impairments and lot option abandonments (I&A) | 404 | 1,718 | 2,633 | 12,210 | ||||||||||||||||||||||||
Homebuilding gross profit before I&A | 79,987 | 18.3 | % | 43,348 | 11.8 | % | 214,687 | 16.8 | % | 115,315 | 11.6 | % | ||||||||||||||||
Interest amortized to cost of sales | 13,423 | 19,824 | 41,246 | 60,952 | ||||||||||||||||||||||||
Homebuilding gross profit before I&A and interest amortized to cost of sales | $ | 93,410 | 21.4 | % | $ | 63,172 | 17.2 | % | $ | 255,933 | 20.0 | % | $ | 176,267 | 17.7 | % | ||||||||||||
Reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, debt extinguishment, impairments and abandonments) to total company net income (loss) (excluding discontinued operations), 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.
Quarter Ended |
Fiscal Year Ended |
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2013 | 2012 | 2013 | 2012 | ||||||||||||||
Net income (loss) | $ | 11,948 | $ | (66,233 | ) | $ | (33,868 | ) | $ | (145,326 | ) | ||||||
Benefit from income taxes | (2,587 | ) | (3,901 | ) | (3,684 | ) | (40,747 | ) | |||||||||
Interest amortized to home construction and land sales expenses, capitalized interest impaired, and interest expense not qualified for capitalization | 26,172 | 36,151 | 100,704 | 132,701 | |||||||||||||
Depreciation and amortization and stock compensation amortization | 4,606 | 4,991 | 15,642 | 17,573 | |||||||||||||
Inventory impairments and option contract abandonments | 404 | 1,718 | 2,650 | 12,514 | |||||||||||||
Loss on debt extinguishment | 998 | 42,350 | 4,636 | 45,097 | |||||||||||||
Joint venture impairment and abandonment charges | — | — | 181 | 36 | |||||||||||||
Adjusted EBITDA | $ | 41,541 | $ | 15,076 | $ | 86,261 | $ | 21,848 |
Source:
Beazer Homes USA, Inc.
Carey Phelps, 770-829-3700
Director,
Investor Relations & Corporate Communications
investor.relations@beazer.com