Beazer Homes Reports Record Second Fiscal Quarter EPS of $3.52, up 24%
Company Raises EPS Outlook for Fiscal Year 2004
ATLANTA, April 22 /PRNewswire-FirstCall/ -- Beazer Homes USA, Inc. (NYSE: BZH) ( www.beazer.com ) today announced results for the quarter and six months ended March 31, 2004, reporting record earnings for the quarter. Highlights of the quarter, compared to the same period of the prior year, are as follows:
Quarter Ended March 31, 2004 * Record diluted EPS: $3.52 (up 24% vs. $2.83 in prior year) * Home closings: 3,684 (up 12%) * Total revenues: $876.6 million (up 32%) * Gross Profit: $177.6 million (up 29%) * Operating Income: $77.8 million (up 27%) * Net income: $48.9 million (up 29%) * New orders: 5,032 (up 10%) * Backlog at 3/31/04: 8,470 homes (up 14%), sales value $2.04 billion (up 37%) * Active Subdivisions at 3/31/04: 508 (up 6%) Record Earnings for March Quarter
Ian J. McCarthy, President and Chief Executive officer, said, "We are very pleased to announce record financial results for our second quarter of fiscal 2004. Our March quarter home closings and revenues increased 12% and 32% respectively, and new orders were up 10%, indicating continued strength and favorable conditions in the housing industry and Beazer Homes' strong position in the market. This was accompanied by record March quarter net income, which was up 29% from the prior year, illustrating our ongoing commitment to achieving profitable growth by leveraging our size, scale and geographic reach, and continuing to execute specific growth and profitability initiatives."
"Beazer Homes' backlog now stands at 8,470 homes with a sales value of $2.04 billion, up 14% and 37%, respectively, from the backlog homes and sales value at March 31, 2003. This sizable backlog increase provides excellent visibility as we move into the second half of fiscal 2004," added McCarthy.
Strong Financial Position Continues in March Quarter
"Beazer Homes' financial position remained strong during the second fiscal quarter," said James O'Leary, Executive Vice President and Chief Financial Officer. "At March 31, 2004, debt to total capitalization and net debt to total capitalization stood at 46% and 44%, respectively, with a cash position of $89.6 million. Our financial results reflect our commitment to improved profitability and focused organic growth within our diverse geographic footprint."
During the second fiscal quarter of 2004, the Company increased its home sales gross margin while total gross and operating profit margins declined slightly compared to the same period a year ago. While the Company continued to realize benefits from the execution of its profit improvement initiatives, such gains were offset by increased marketing expenses of approximately $3.5 million associated with the Company's branding initiative and ongoing warranty costs of approximately $11.4 million associated with construction defect claims from water intrusion at one of its Midwest divisions.
Total inventory of $2.27 billion at March 31, 2004 includes $238.1 million, net of cash deposits, of consolidated inventory not owned, with a corresponding balance of obligations related to consolidated inventory not owned, reflecting the full application of FIN 46R.
Beazer Homes Targets EPS $15.75 - $16.00 in Fiscal 2004
"Our performance for the six months ended March 31, 2004, combined with our significant level of existing backlog and our expectations of continued strength in the housing market provide us confidence in our future growth opportunities," said McCarthy. "In addition, we expect continued execution on our strategic initiatives that leverage our national brand, capitalize on our broad geographic profile through focused product expansion and price-point diversification, and also drive best practices to achieve optimal efficiencies, will place us in a strong position for continued growth. Absent any unanticipated adverse changes, we are raising our outlook for diluted earnings per share to be in the range of $15.75 - $16.00 in fiscal 2004, representing approximately 25% growth over fiscal 2003."
Beazer Homes USA, Inc., headquartered in Atlanta 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.
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, potential liability as a result of construction defect, product liability and warranty claims, the possibility that the Company's improvement plan for the Midwest will not achieve desired results, and other factors described in the Company's Form S- 4/A filed with the Securities and Exchange Commission on April 9, 2004 and Annual Report and Form 10-K for the year ended September 30, 2003.
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, 2004 2003 2004 2003 INCOME STATEMENT Revenues $876,581 $665,567 $1,686,689 $1,365,727 Costs and expenses: Home construction and land sales 699,020 527,733 1,343,969 1,091,450 Selling, general and administrative expense 99,717 76,347 189,224 153,724 Operating income 77,844 61,487 153,496 120,553 Other income 2,250 1,277 3,952 3,236 Income before income taxes 80,094 62,764 157,448 123,789 Income taxes 31,236 24,792 61,404 48,897 Net income $48,858 $37,972 $96,044 $74,892 Net income per common share: Basic $3.66 $2.96 $7.22 $5.85 Diluted $3.52 $2.83 $6.94 $5.59 Weighted average shares outstanding, in thousands: Basic 13,331 12,815 13,306 12,813 Diluted 13,865 13,403 13,846 13,403 Interest incurred $18,532 $16,916 $35,403 $33,498 Interest amortized to cost of sales $15,187 $12,200 $28,874 $24,100 Depreciation and amortization $4,021 $2,905 $8,035 $5,684 SELECTED BALANCE SHEET DATA March 31, 2004 2003 Cash $89,559 $18,818 Inventory 2,273,855 1,541,815 Total assets 2,764,900 1,953,434 Total debt 948,979 739,735 Shareholders' equity 1,094,032 870,958 BEAZER HOMES USA, INC. CONSOLIDATED OPERATING AND FINANCIAL DATA (Continued) (Dollars in thousands) OPERATING DATA Quarter Ended Six Months Ended March 31, March 31, SELECTED OPERATING DATA 2004 2003 2004 2003 Closings: Southeast region 1,197 1,093 2,454 2,186 West region 1,404 1,095 2,618 2,135 Central region 208 272 448 538 Mid-Atlantic region 367 233 685 528 Midwest region 508 604 1,087 1,392 Total closings 3,684 3,297 7,292 6,779 New orders, net of cancellations: Southeast region 1,636 1,628 2,679 2,643 West region 1,885 1,277 3,339 2,216 Central region 351 296 536 528 Mid-Atlantic region 403 496 719 948 Midwest region 757 882 1,063 1,385 Total new orders 5,032 4,579 8,336 7,720 Backlog units at end of period: Southeast region 2,546 2,324 West region 3,008 1,914 Central region 484 497 Mid-Atlantic region 1,151 1,120 Midwest region 1,281 1,605 Total backlog units 8,470 7,460 Dollar value of backlog at end of period $2,036,493 $1,485,401 Active subdivisions: Southeast region 184 186 West region 98 89 Central region 44 33 Mid-Atlantic region 51 39 Midwest region 131 131 Total active subdivisions 508 478 BEAZER HOMES USA, INC. CONSOLIDATED OPERATING AND FINANCIAL DATA (Continued) (Dollars in thousands) Quarter Ended Six Months Ended March 31, March 31, SUPPLEMENTAL FINANCIAL DATA: 2004 2003 2004 2003 Revenues Home sales $853,638 $655,614 $1,646,935 $1,344,384 Land and lot sales 13,831 842 21,566 3,337 Mortgage origination revenue 12,294 12,926 24,440 25,410 Intercompany elimination - mortgage (3,182) (3,815) (6,252) (7,404) Total revenues $876,581 $665,567 $1,686,689 $1,365,727 Cost of home construction and land sales Home sales $690,210 $530,841 $1,330,327 $1,096,205 Land and lot sales 11,992 707 19,894 2,649 Intercompany elimination - mortgage (3,182) (3,815) (6,252) (7,404) Total costs of home construction and land sales $699,020 $527,733 $1,343,969 $1,091,450 Selling, general and administrative Homebuilding operations $91,994 $69,330 $174,107 $139,846 Mortgage origination operations 7,723 7,017 15,117 13,878 Total selling, general and administrative $99,717 $76,347 $189,224 $153,724
SOURCE Beazer Homes USA, Inc. CONTACT: Leslie H. Kratcoski, Director, Investor Relations of Beazer Homes USA, Inc., +1-770-829-3764, or lkratcos@beazer.com