SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C.  20549

 

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

Date of Report: April 23, 2003

 

BEAZER HOMES USA, INC.

(Exact name of registrant as specified in its charter)

 

 

5775 Peachtree Dunwoody Road, Suite B-200

Atlanta Georgia 30342

(Address of Principal

Executive Offices)

 

(404) 250-3420

(Registrant’s telephone number, including area code)

 

None

(Former name or former address, if changed since last report)

 

 

Item 7.  Financial Statements and Exhibits.

 

(c)  Exhibits

 

99.1                           Press release issued April 22, 2003.

 

 

Item 9.  Regulation FD Disclosure

 

On April 22, 2003, Beazer Homes USA, Inc. (the “Company”) reported earnings and results of operations for the quarterly period ended March 31, 2003 and the six months ended March 31, 2003.  A copy of this press release is attached hereto as exhibit 99.1.  For additional information, please see the press release.  The information in exhibit 99.1 is being furnished pursuant to Item 12 of Form 8-K.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

			BEAZER HOMES USA, INC.
Date: April 23, 2003		By:		/s/ David S. Weiss
				David S. Weiss
				Executive Vice President and Chief Financial Officer

 

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Exhibit 99.1

 

		Press Release
		For Immediate Release

 

Beazer Homes Announces Record Second Fiscal Quarter EPS of $2.83, Up 11%

 

Atlanta, Ga., April 22, 2003 - Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced results for the quarter ended March 31, 2003, the second quarter of its 2003 fiscal year.  Highlights of the quarter, compared to the same quarter of the prior year, are as follows:

 

•      Record Diluted EPS: $2.83 (up 11% vs. $2.56 in prior year)

•      Home closings: 3,297 (up 35%)

•      Total revenues $666 million (up 32%)

•      Earnings before interest, taxes, depreciation and amortization (EBITDA): $77.9 million (up 57%)

•      Gross margin (before interest): 22.5% (up 230 basis points)

•      EBITDA Margin: 11.7% (up 180 basis points)

•      Net income: $38.0 million (up 57%)

•      Debt to total capitalization: 46% (down from 50%)

•      New orders: 4,579 homes (up 46%)

•      Backlog: 7,460 homes (up 55%), sales value $1.5 billion (up 47%)

 

Record Earnings for Second Quarter of Fiscal 2003

Ian J. McCarthy, President and Chief Executive Officer of Beazer Homes, said, “We are extremely pleased to announce record March quarter EPS of $2.83 and net income of $38 million for the second quarter of our 2003 fiscal year.  Net income increased 57% over the second quarter of fiscal 2002 while revenues were up 32%.  Once again, we reported a greater increase in net income than revenues as our gross margin hit an all-time company record.  Gross margin before interest was 22.5%, up 230 basis points from March 2002.”

 

Mr. McCarthy continued, “The increase in our gross margin for the quarter reflects the continuing strong housing environment as well as our ability to control costs and build more efficiently.  Initiatives to lower our home construction costs, through increased use of national purchasing contracts and more efficient home design, have been and continue to be a major emphasis at Beazer and are beginning to yield significant benefits, as demonstrated by this quarter’s results.  Our progress on these initiatives has accelerated recently as we have been able to take advantage of our increased size and enhanced purchasing power.  In addition, margins are especially strong in our California markets, which comprise approximately 20% of our revenues for the quarter.”

 

Record New Orders

The Company also reported that it had 4,579 new orders for the quarter ended March 31, 2003, up 46% from the same quarter of the prior year and an all-time Company record.  Backlog of 7,460 homes at March 31, 2003 was up 55% from March 31, 2002.  March 2003 new orders and backlog include Crossmann Communities, Inc., which Beazer acquired in April 2002.  On a pro forma basis, new orders for the quarter ended March 31, 2002, including Crossmann’s orders, would have been 4,717 homes and backlog at March 31, 2002 would have been 7,360 homes.

 

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Strong Financial Position

David S. Weiss, Executive Vice President and Chief Financial Officer, said, “We ended the March 2003 quarter with one of our strongest balance sheets ever.  Our ratio of debt to total capitalization improved from 50% to 46% relative to the March quarter of the prior year.  In addition, we ended the quarter with $19 million of cash on hand and no borrowings outstanding under our revolving credit facility.  This performance demonstrates how we have both grown the business and generated positive cash flow from operations over the past year.”

 

Beazer Begins Executing Stock Repurchase Plan

The Company also announced that during the quarter ended March 31, 2003 it repurchased 128,000 shares of its common stock for $6.9 million or approximately $54 per share.  These repurchases were made pursuant to a one million share repurchase program authorized by its Board of Directors in February 2003.

 

Mr. Weiss said, “During the quarter we began to prudently execute the stock repurchase plan authorized by our Board of Directors.   We were able to do this while still reducing our leverage and maintaining a very strong financial position.”

 

Beazer Reiterates Target EPS of $12.25 Per Share for Fiscal 2003

Mr. McCarthy concluded, “Taking into account our record performance during the March quarter, with diluted earnings of $2.83 per share, we have now earned $5.59 for the six months ended March 31, 2003.  This performance, combined with our strong backlog allows us to reiterate our EPS target for fiscal 2003 of $12.25 for the full fiscal year, which represents a 14% increase over fiscal 2002.  This target is currently based on approximately 15,500 home closings with an average price of approximately $200,000.  We recognize that these targets are subject to economic fluctuations in the current uncertain macroeconomic environment.”

 

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.

 

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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 March 31,
		2003			2002
Reconciliation of Net Income to EBITDA
Net Income		$	37,972		$	24,177
Add:
Income taxes		24,792			15,456
Interest		12,200			8,176
Depreciation and amortization		2,905			1,870
EBITDA		$	77,869		$	49,679

 

Contact:	David S. Weiss
	Executive Vice President and
	Chief Financial Officer
	(404) 250-3420
	dweiss@beazer.com

 

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BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA

(Dollars in thousands, except per share amounts)

 

FINANCIAL DATA

 

		Quarter Ended March 31,						Six Months Ended March 31,
		2003			2002			2003			2002
INCOME STATEMENT
Revenues		$	665,567		$	503,312		$	1,365,726		$	993,029
Costs and expenses:
Home construction and land sales		515,533			401,742			1,067,350			794,047
Interest		12,200			8,176			24,100			15,938
Selling, general and administrative expense		76,347			55,139			153,724			107,691
Operating income		61,487			38,255			120,552			75,353
Other income		1,277			1,378			3,236			2,232
Income before income taxes and extraordinary item		62,764			39,633			123,788			77,585
Income taxes		24,792			15,456			48,897			30,258
Net income		$	37,972		$	24,177		$	74,891		$	47,327
Net income per common share:
Basic		$	2.96		$	2.84		$	5.85		$	5.59
Diluted		$	2.83		$	2.56		$	5.59		$	5.02
Weighted average shares outstanding, in thousands:
Basic		12,815			8,524			12,813			8,464
Diluted		13,403			9,459			13,403			9,419
Interest incurred		$	16,916		$	9,646		$	33,498		$	17,789
Depreciation and amortization		$	2,905		$	1,870		$	5,684		$	3,837

 

SELECTED BALANCE SHEET DATA
		March 31,
		2003			2002
Cash		$	18,818		$	—
Inventory		1,541,815			923,831
Total assets		1,953,434			1,018,456
Total debt		739,735			395,522
Shareholders’ equity		870,958			400,765

 

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BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA (Continued)

(Dollars in thousands)

 

OPERATING DATA

 

		Quarter Ended March 31,						Six Months Ended March 31,
		2003			2002			2003		2002
SELECTED OPERATING DATA
Closings:
Southeast region		1,093			718			2,186		1,506
West region		1,095			1,081			2,135		2,065
Central region		272			257			538		492
Mid-Atlantic region		233			383			528		741
Midwest region		604			—			1,392		—
Total closings		3,297			2,439			6,779		4,804
New orders, net of cancellations:
Southeast region		1,628			1,098			2,643		2,051
West region		1,277			1,273			2,216		2,246
Central region		296			358			528		590
Mid-Atlantic region		496			413			948		765
Midwest region		882			—			1,385		—
Total new orders		4,579			3,142			7,720		5,652
Backlog at end of period		7,460			4,825
Dollar value of backlog at end of period		$	1,485,401		$	1,013,648
Active subdivisions:
Southeast region		186			147
West region		89			76
Central region		33			29
Mid-Atlantic region		39			38
Midwest region		131			—
Total active subdivisions		478			290

 

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BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA (Continued)

(Dollars in thousands)

 

		Quarter Ended March 31,						Six Months Ended March 31,
		2003			2002			2003			2002
SUPPLEMENTAL FINANCIAL DATA:
Revenues
Home sales		$	655,614		$	495,057		$	1,344,383		$	977,093
Land and lot sales		842			2,900			3,337			5,524
Mortgage origination revenue		12,926			7,851			25,410			15,360
Intercompany elimination - mortgage		(3,815		)	(2,496		)	(7,404		)	(4,948		)
Total revenues		$	665,567		$	503,312		$	1,365,726		$	993,029
Cost of home construction and land sales
Home sales		$	518,641		$	401,806		$	1,072,105		$	794,987
Land and lot sales		707			2,432			2,649			4,008
Intercompany elimination - mortgage		(3,815		)	(2,496		)	(7,404		)	(4,948		)
Total costs of home construction and land sales		$	515,533		$	401,742		$	1,067,350		$	794,047
Selling, general and administrative
Homebuilding operations		$	69,330		$	50,818		$	139,846		$	99,178
Mortgage origination operations		7,017			4,321			13,878			8,513
Total selling, general and administrative		$	76,347		$	55,139		$	153,724		$	107,691

 

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