SEC Filing | Beazer Homes USA, Inc.

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

/x/	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended June 30, 2000

/ /	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-12822

BEAZER HOMES USA, INC.

(Exact name of registrant as specified in its charter)

DELAWARE
(State or other jurisdiction of
incorporation or organization)

58-2086934
(I.R.S. employer
identification no.)

5775 Peachtree Dunwoody Road, Suite B-200, Atlanta, Georgia 30342

(Address of principal executive offices) (Zip Code)

(404) 250-3420

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding twelve months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.

Yes /x/

No / /

Class		Outstanding at August 11, 2000
Common Stock, par value $.01 per share		8,473,872 shares

Page 1 of 17 Pages
Exhibit Index Appears on Page 16

BEAZER HOMES USA, INC.
FORM 10-Q

INDEX

			Page No.
PART I FINANCIAL INFORMATION
	Item 1 Financial Statements
		Condensed Consolidated Balance Sheets, June 30, 2000 (unaudited) and September 30, 1999	3
		Unaudited Condensed Consolidated Statements of Operations, Three and Nine Months Ended June 30, 2000 and 1999	4
		Unaudited Condensed Consolidated Statements of Cash Flows, Nine Months Ended June 30, 2000 and 1999	5
		Notes to Unaudited Condensed Consolidated Financial Statements	6
	Item 2 Management's Discussion and Analysis of Financial Condition and Results of Operations		9
	Item 3 Quantitative and Qualitative Disclosures About Market Risk		15
PART II OTHER INFORMATION
	Item 6 Exhibits and Reports on Form 8-K		16
SIGNATURES			17

Part I. Financial Information

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(dollars in thousands, except per share amounts)

			June 30, 2000			September 30, 1999
			(unaudited)
ASSETS
Cash and cash equivalents			$	—		$	—
Accounts receivable				14,688			21,416
Inventory				669,787			532,559
Property, plant and equipment, net				12,595			13,102
Goodwill, net				7,450			8,051
Other assets				21,449			19,440

		Total assets	$	725,969		$	594,568

LIABILITIES AND STOCKHOLDERS' EQUITY
Trade accounts payable			$	58,499		$	45,984
Other liabilities				89,056			98,922
Revolving credit facility				110,000			—
Senior notes				215,000			215,000

		Total liabilities		472,555			359,906

Stockholders' equity:
	Preferred stock (par value $.01 per share, 5,000,000 shares authorized, no shares issued and outstanding)			—			—
	Common stock (par value $.01 per share, 30,000,000 shares authorized, 12,265,899 issued, 8,473,872 and 8,974,122 outstanding)			123			123
	Paid in capital			194,528			194,528
	Retained earnings			124,405			97,488
	Unearned restricted stock			(4,438	)		(5,494	)
	Treasury stock (3,792,027 and 3,291,777 shares)			(61,204	)		(51,983	)

		Total stockholders' equity		253,414			234,662

		Total liabilities and stockholders' equity	$	725,969		$	594,568

See Notes to Condensed Consolidated Financial Statements

BEAZER HOMES USA, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(in thousands, except per share amounts)

			Three Months Ended June 30,						Nine Months Ended June 30,
			2000			1999			2000			1999
Total revenue			$	389,557		$	370,431		$	1,031,263		$	939,885
Costs and expenses:
	Home construction and land sales			318,912			306,424			850,385			779,632
	Interest			7,252			6,472			18,847			17,769
	Selling, general and administrative			42,450			40,571			112,911			104,689

Operating income				20,943			16,964			49,120			37,795
Other expense				(3,608	)		(294	)		(4,994	)		(364	)

Income before income taxes				17,335			16,670			44,126			37,431
Provision for income taxes				6,761			6,418			17,209			14,410

	Net income		$	10,574		$	10,252		$	26,917		$	23,021

Dividends and other payments to preferred stockholders			$	—		$	36		$	—		$	3,343
Net income applicable to common stockholders:
		Basic	$	10,574		$	10,216		$	26,917		$	19,678
		Diluted	$	10,574		$	10,252		$	26,917		$	23,021
Weighted average number of shares:
		Basic		8,088			8,285			8,310			6,908
		Diluted		8,412			8,919			8,622			8,922
Net income per common share:
		Basic	$	1.31		$	1.23		$	3.24		$	2.85
		Diluted	$	1.26		$	1.15		$	3.12		$	2.58

See Notes to Condensed Consolidated Financial Statements

BEAZER HOMES USA, INC.

UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

			Nine Months Ended June 30,
			2000			1999
Cash flows from operating activities:
	Net income		$	26,917		$	23,021
	Adjustments to reconcile net income to net cash used by operating activities:
		Depreciation and amortization		5,159			3,449
	Changes in operating assets and liabilities, net of effects of acquisitions
		Increase in inventory		(137,228	)		(53,629	)
		Increase (decrease) in trade accounts payable		12,515			(18,304	)
		Other changes		(4,881	)		13,290

Net cash used by operating activities				(97,518	)		(32,173	)

Cash flows from investing activities:
	Acquisitions, net of cash acquired			—			(91,800	)
	Capital expenditures			(3,013	)		(2,186	)

Net cash used by investing activities				(3,013	)		(93,986	)

Cash flows from financing activities:
	Changes in revolving credit facility, net			110,000			62,000
	Dividends and other payments to preferred stockholders			—			(3,449	)
	Common stock repurchases			(9,221	)		—
	Debt issuance costs			(248	)		—

Net cash provided by financing activities				100,531			58,551

Increase (decrease) in cash and cash equivalents				—			(67,608	)
Cash and cash equivalents at beginning of period				—			67,608

Cash and cash equivalents at end of period			$	—		$	—

See Notes to Condensed Consolidated Financial Statements

BEAZER HOMES USA, INC.

NOTES TO UNAUDITED CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(1) Basis of Presentation

The accompanying unaudited condensed consolidated financial statements of Beazer Homes USA, Inc. ("Beazer") have been prepared in accordance with generally accepted accounting principles for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. Such financial statements do not include all of the information and disclosures required by generally accepted accounting principles for complete financial statements. In our opinion, all adjustments (consisting of normal recurring accruals) necessary for a fair presentation have been included in the accompanying condensed financial statements. For further information, refer to our audited consolidated financial statements incorporated by reference in our Annual Report on Form 10-K for the year ended September 30, 1999.

(2) Inventory

A summary of inventory is as follows (in thousands):

	June 30, 2000		September 30, 1999
Homes under construction	$	333,341	$	253,031
Development projects in progress		289,031		235,077
Unimproved land held for future development		3,243		4,539
Model homes		44,172		39,912

	$	669,787	$	532,559

Homes under construction includes homes finished and ready for delivery and homes in various stages of construction. We had 176 completed homes ($25.7 million) and 162 completed homes ($27.1 million) at June 30, 2000 and September 30, 1999, respectively, that were not subject to a sales contract, excluding model homes.

Development projects in progress consist principally of land and land improvement costs. Certain of the fully developed lots in this category are reserved by a deposit or sales contract.

(3) Interest

The following table sets forth certain information regarding interest:

		Three Months Ended June 30,				Nine Months Ended June 30,
		2000		1999		2000		1999
During the period:
	Interest incurred	$	8,316	$	6,962	$	22,606	$	19,981
	Previously capitalized interest amortized to costs and expenses	$	7,252	$	6,472	$	18,847	$	17,769
At the end of the period:
	Capitalized interest in ending inventory	$	14,247	$	12,025	$	14,247	$	12,025

(4) Preferred Stock Transactions

During the first nine months of fiscal 1999, we paid $1.3 million in cash to holders of 1,732,460 shares of our Series A Cumulative Convertible Exchangeable Preferred Stock (the "Preferred Stock") to induce those holders to convert their preferred shares into 2,273,564 common shares. We also called the remaining outstanding Preferred Stock for redemption, of which 265,376 shares were voluntarily converted into 348,406 common shares and the remaining 2,164 shares of Preferred Stock were redeemed for cash (including accrued and unpaid dividends) at $26.678 per preferred share. We currently have no shares of Preferred Stock outstanding.

5) Earnings Per Share

Basic and diluted earnings per share were calculated as follows (in thousands, except per share amounts):

		Three Months Ended June 30,				Nine Months Ended June 30,
		2000		1999		2000		1999
Earnings
	Net income	$	10,574	$	10,252	$	26,917	$	23,021
	Less: Dividends and other payments to preferred stockholders		—		36		—		3,343

Net income applicable to common stockholders		$	10,574	$	10,216	$	26,917	$	19,678

Basic:
Net income applicable to common stockholders		$	10,574	$	10,216	$	26,917	$	19,678
Weighted average number of common shares outstanding			8,088		8,285		8,310		6,908

Basic earnings per share		$	1.31	$	1.23	$	3.24	$	2.85

Diluted:
Net income applicable to common stockholders		$	10,574	$	10,216	$	26,917	$	19,678
Add back: Dividends and other payments to preferred stockholders			—		36		—		3,343

Adjusted net income applicable to common stockholders		$	10,574	$	10,252	$	26,917	$	23,021

Weighted average number of common shares outstanding			8,088		8,285		8,310		6,908
Effect of dilutive securities-
	Assumed conversion of Preferred Stock		—		274		—		1,647
	Restricted stock		286		273		270		268
	Options to acquire common stock		38		87		42		99

Diluted weighted common shares outstanding			8,412		8,919		8,622		8,922

Diluted earnings per share		$	1.26	$	1.15	$	3.12	$	2.58

(6) Revolving Credit Agreement

We maintain a revolving line of credit with a group of banks. During December 1999, we amended the credit facility and added two banks to the group, increasing the facility from $200 million to $250 million of unsecured borrowings. Borrowings under the credit facility generally bear interest at a fluctuating rate based upon the corporate base rate of interest announced by the lead bank, the federal funds rate or LIBOR. All outstanding borrowings are due in November 2002. The credit facility contains various operating and financial covenants. Each of our significant subsidiaries is a guarantor under the credit facility.

(7) Investment in Unconsolidated Joint Venture

We have a non-controlling 49% interest in Premier Communities, a joint venture with Corporacion GEO S.A. de C.V., a Mexican homebuilder, to build affordable housing in the United States. The joint venture has experienced losses since its inception in 1997 and is now in the process of winding down. Included in other expense for the quarter ended June 30, 2000 is a $3.3 million charge ($.24 per share after-tax) to reflect the write-off of our remaining, now impaired, investment in the joint venture and our expected obligation to fund certain of the letters of credit we have issued to guarantee our share of the outstanding indebtedness of the joint venture. In addition to the charge for the costs of winding down the joint venture, other expense includes our share of the joint venture's operating losses of $1.0 million and $2.8 million for the three and nine months ended June 30, 2000, respectively and $0.5 million and $1.1 million for the three and nine months ended June 30, 1999, respectively. We currently do not expect to record further charges relating to the winding down of the joint venture in the future.

(8) Acquisitions

In December 1998, we acquired the assets of the homebuilding operations of Trafalgar House Property, Inc. ("THPI") for approximately $90 million in cash. We funded this acquisition with borrowings under the Credit Facility. We accounted for the acquisition as a purchase and allocated the purchase price to reflect the fair value of assets and liabilities acquired. Such allocation resulted principally in a reduction in inventory from THPI's historical carrying value and no residual goodwill.

(9) Treasury Stock Repurchase Program

In November 1999, our Board of Directors approved a stock repurchase plan authorizing the purchase of up to 500,000 shares of our outstanding common stock. During the first two quarters of fiscal 2000, we completed the plan and repurchased 500,000 shares on the open market for an aggregate purchase price of $9.2 million.

(10) Recent Accounting Pronouncements

In June 1998, the FASB issued Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities" ("SFAS 133"). SFAS 133 (as now amended) is effective for all fiscal quarters of years beginning after June 15, 2000. We do not believe this standard will have a material effect on our financial statements.

BEAZER HOMES USA, INC.
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS

Item 2: Management's Discussion and Analysis of Financial Condition and Results of Operations

OVERVIEW:

Homebuilding: We design, build and sell single family homes in the following states:

Southeast	Southwest	Central	Mid-Atlantic
Florida	Arizona	Texas	Maryland
Georgia	California		New Jersey
North Carolina	Nevada		Pennsylvania
South Carolina			Virginia
Tennessee

We intend, subject to market conditions, to expand in our current markets and to consider entering new markets either through expansion from existing markets or through acquisitions of established regional homebuilders.

Most of our homes are designed to appeal to entry-level and first time move-up homebuyers, and are generally offered for sale in advance of their construction. Once a sales contract has been signed, the transaction is considered a "new order." Homes covered by these sales contracts are considered "backlog." We do not recognize revenue on homes in backlog until the sales are closed and the risk of ownership has been transferred to the buyer.

Ancillary Businesses: We provide mortgage origination services for our homebuyers through Beazer Mortgage Corp. Beazer Mortgage originates, processes and sells mortgages to third party investors. Beazer Mortgage Corp. does not retain or service the mortgages that it originates. During fiscal 1999 we began providing title insurance services in certain markets through Homebuilders Title Services, Inc. We will continue to evaluate opportunities to provide other ancillary services to our homebuyers.

Value Created: We evaluate our financial performance using Value Created, a variation of economic profit or economic value added. Value Created measures the extent to which we beat our cost of capital. Most of our employees receive incentive compensation based upon a combination of Value Created and the change in Value Created. We believe that our Value Created system encourages managers to act like owners, rewards profitable growth and focuses attention on long-term loyalty and performance.

The following presents certain operating and financial data for Beazer (dollars in thousands):

		Three Months Ended June 30,						Nine Months Ended June 30,
		2000				1999		2000				1999
		Amount		% Change		Amount		Amount		% Change		Amount
Number of new orders, net of cancellations: (a)
	Southeast region		705	(19.9)	%		880		2,232	(8.3)	%		2,435
	Southwest region		939	20.7			778		2,540	12.7			2,254
	Central region		241	63.9			147		529	49.0			355
	Mid-Atlantic region		305	(7.3	)		329		933	17.1			797

	Total		2,190	2.6			2,134		6,234	6.7			5,841

Number of closings:
	Southeast region		763	(4.1)	%		796		1,978	(3.0)	%		2,039
	Southwest region		752	2.5			734		2,143	4.3			2,054
	Central region		153	(6.1	)		163		404	(5.4	)		427
	Mid-Atlantic region		311	16.0			268		814	27.6			638

	Total		1,979	0.9			1,961		5,339	3.5			5,158

Total homebuilding revenue:
	Southeast region	$	127,966	(3.9)	%	$	133,118	$	330,909	(2.6)	%	$	339,795
	Southwest region		153,278	7.1			143,083		425,500	13.5			374,821
	Central region		26,428	(7.2	)		28,482		73,372	(3.6	)		76,130
	Mid-Atlantic region		71,952	18.3			60,798		179,039	28.1			139,775

	Total	$	379,624	3.9		$	365,481	$	1,008,820	8.4		$	930,521

Average sales price per home closed:
	Southeast region	$	167.7	0.3	%	$	167.2	$	167.3	0.4	%	$	166.6
	Southwest region		203.8	4.6			194.9		198.6	8.8			182.5
	Central region		172.7	(1.1	)		174.7		181.6	1.9			178.3
	Mid-Atlantic region		231.4	2.0			226.9		219.9	0.4			219.1
	Total		191.8	2.9			186.4		189.0	4.7			180.4

(a): New orders for the nine months ended June 30, 1999 do not include 555 homes in backlog acquired in a business acquisition.

		June 30,
		2000				1999
		Amount		% Change		Amount
Backlog units at end of period:
	Southeast region		1,253	(14.3)	%		1,462
	Southwest region		1,183	25.5			943
	Central region		331	34.6			246
	Mid-Atlantic region		686	6.5			644

	Total		3,453	4.8			3,295

Aggregate sales value of homes in backlog at end of period:		$	678,836	10.8%		$	612,552

Number of active subdivisions at end of period:
	Southeast region		115	2.7%			112
	Southwest region		74	8.8			68
	Central region		24	(14.3	)		28
	Mid-Atlantic region		39	(7.1	)		42

	Total		252	0.8			250

New Orders and Backlog: New orders increased by 3% and 7% during the three and nine month periods ended June 30, 2000, respectively, with only a 1% increase in the number of active subdivisions at June 30, 2000. The increase reflects order strength in our Central and Southwest Regions. We believe that the increase in new orders in many of our markets reflects the positive impact of population and employment growth fueled by immigration, combined with an overall strong economic environment. New orders for the three and nine months ended June 30, 2000 declined in most of our Southeast markets, where increased time to obtain building permits resulted in delays in opening new subdivisions.

The aggregate dollar value of homes in backlog at June 30, 2000 increased 11% from June 30, 1999, reflecting a 5% increase in the number of homes in backlog and a 6% increase in the average price of homes in backlog, from $185,900 at June 30, 1999 to $196,600 at June 30, 2000. The increased average price of homes in backlog reflects our continued ability to raise prices in most of our markets, as well as increased sales of options and upgrades on homes through our design centers.

The following table provides additional details of revenues and certain expenses and shows certain items expressed as a percentage of certain components of revenues (dollars in thousands):

	Three Months Ended June 30,						Nine Months Ended June 30,
	2000			1999			2000			1999
Details of revenues and certain expenses:
Revenues:
Home sales	$	379,624		$	365,481		$	1,008,820		$	930,521
Land and lot sales		7,146			3,553			15,602			4,555
Mortgage operations		4,551			3,467			11,285			9,829
Intercompany elimination—mortgage		(1,764	)		(2,070	)		(4,444	)		(5,020	)

Total revenue	$	389,557		$	370,431		$	1,031,263		$	939,885

Cost of home construction and land sales:
Home sales	$	315,642		$	305,521		$	842,829		$	780,874
Land and lot sales		5,034			2,973			12,000			3,778
Intercompany elimination—mortgage		(1,764	)		(2,070	)		(4,444	)		(5,020	)

Total cost of home construction and land sales	$	318,912		$	306,424		$	850,385		$	779,632

Selling, general and administrative:
Homebuilding operations	$	39,760		$	38,437		$	105,936		$	98,728
Mortgage origination operations		2,690			2,134			6,975			5,961

Total selling, general and administrative	$	42,450		$	40,571		$	112,911		$	104,689

Certain items as a percentage of revenues:
As a percentage of total revenue:
Costs of home construction and land sales		81.9	%		82.7	%		82.5	%		82.9	%
Amortization of previously capitalized interest		1.9	%		1.7	%		1.8	%		1.9	%
Selling, general and administrative
Homebuilding operations		10.2	%		10.4	%		10.3	%		10.5	%
Mortgage operations		0.7	%		0.6	%		0.7	%		0.6	%
As a percentage of home sales revenue:
Costs of home construction		83.1	%		83.6	%		83.5	%		83.9	%

Revenues: Revenues increased by 5% for the three months ended June 30, 2000 compared to the same period in the prior year, reflecting a 3% increase in the average sales price of homes closed, an increase in revenues from land sales, and a 1% increase in the number of homes closed. The 10% increase in revenues for the nine months ended June 30, 2000 reflects a 4% increase in the number of homes closed and a 5% increase in the average price.

Cost of Home Construction: The cost of home construction as a percentage of home sales decreased for the three and nine months ended June 30, 2000, compared to the same periods of the prior year, as a result of our ability to raise prices, which has more than offset cost increases. In addition the increase in our sales of options and upgrades has contributed to the improvement in gross profit margin. Such options and upgrades generally have gross margins approximately double that of our base homes.

Selling, General and Administrative Expense: Our selling, general and administrative ("SG&A") expense decreased as a percentage of total revenues for the three and nine months ended June 30, 2000, compared to the same periods of the prior year, as a result of higher revenues, giving us greater leverage and operating efficiency on the fixed portion of such expense, and the completion of the integration of our Mid-Atlantic division, acquired in 1999.

Mortgage Origination Operations: Revenues increased for Beazer Mortgage during the three and nine months ended June 30, 2000, compared to the same periods of the prior year, as a result of both the increase in homebuilding revenues and the completion of the rollout of Beazer Mortgage to all of our markets. Beazer Mortgage began closing loans in our Mid-Atlantic region during fiscal 2000, which should contribute to increased mortgage revenues in the balance of fiscal 2000. The increase in SG&A expenses for Beazer Mortgage include the costs of starting up mortgage operations in the Mid-Atlantic region.

Investment in Unconsolidated Joint Venture: We have a non-controlling 49% interest in Premier Communities, a joint venture with Corporacion GEO S.A. de C.V., a Mexican homebuilder, to build affordable housing in the United States. The joint venture has experienced losses since its inception in 1997 and is now in the process of winding down. Included in other expense for the quarter ended June 30, 2000 is a $3.3 million charge ($.24 per share after-tax) for the write-off of our remaining, now impaired, investment in the joint venture and our expected obligation to fund certain of the letters of credit we have issued to guarantee our share of the outstanding indebtedness of the joint venture. In addition to the charge for the costs of winding down the joint venture, other expense includes our share of the joint venture's operating losses of $1.0 million and $2.8 million for the three and nine months ended June 30, 2000, respectively and $0.5 million and $1.1 million for the three and nine months ended June 30, 1999, respectively. We currently do not expect to record further charges relating to the winding down of the joint venture in the future.

Income Taxes: Our effective income tax rate increased from 38.5% to 39.0% for both the three and nine month periods ended June 30, 2000 as a result of a higher overall state tax rate.

FINANCIAL CONDITION AND LIQUIDITY:

We fulfill our short-term cash requirements with cash generated from operations and unused funds available from an unsecured revolving credit facility (the "Credit Facility") with a group of banks. In December 1999, we amended the Credit Facility, adding two banks (now eight banks) and increasing the facility from $200 million to $250 million. Available borrowings under the facility are limited to certain percentages of homes under contract, unsold homes, substantially improved lots, raw land and accounts receivable. At June 30, 2000, we had $110 million outstanding and additional available borrowings of $114 million under the Credit Facility.

We have $215 million of outstanding senior debt, which is comprised of $100 million of 8⁷/8% Senior Notes due in April 2008 and $115 million of 9% Senior Notes due in March 2004 (collectively, the "Senior Notes"). All of our significant subsidiaries are guarantors of the Senior Notes and are jointly and severally liable for obligations under the Senior Notes. Separate financial statements and other disclosures concerning each of the significant subsidiaries are not included, as the aggregate assets, liabilities, earnings and equity of the subsidiaries equal such consolidated amounts and separate subsidiary financial statements are not considered material to investors. The total assets, revenues and operating profit of the non-guarantor subsidiaries are in the aggregate immaterial on a consolidated basis. Neither the Credit Facility nor the Senior Notes restrict distributions to Beazer Homes USA, Inc. by its subsidiaries.

We have utilized, and will continue to utilize, land options as a method of controlling and subsequently acquiring land. At June 30, 2000, we had 15,189 lots under option. At June 30, 2000, we had commitments with respect to option contracts with specific performance obligations of approximately $34.7 million. We expect to exercise all of our option contracts with specific performance obligations and, subject to market conditions, substantially all of our options contracts without specific performance obligations.

During the first nine months of fiscal 1999, we paid $1.3 million in cash to holders of 1,732,460 shares of our Series A Cumulative Convertible Exchangeable Preferred Stock (the "Preferred Stock") to induce those holders to convert their preferred shares into 2,273,564 common shares. We also called the remaining outstanding Preferred Stock for redemption, of which 265,376 shares were voluntarily converted into 348,406 common shares and the remaining 2,164 shares of Preferred Stock were redeemed for cash (including accrued and unpaid dividends) of $26.678 per preferred share. We currently have no shares of Preferred Stock outstanding.

In January 2000, we filed a $300 million universal shelf registration statement on Form S-3 with the Securities and Exchange Commission. Pursuant to the filing, the Company may, from time to time over an extended period, offer new debt and/or equity securities. This shelf registration will allow the Company to expediently access capital markets periodically in the future. The timing and amount of offerings, if any, will depend on market and general business conditions.

We believe that our current borrowing capacity, together with anticipated cash flows from operations, is sufficient to meet liquidity needs for the foreseeable future. There can be no assurance, however, that amounts available in the future from our sources of liquidity will be sufficient to meet future capital needs. The amount and types of indebtedness that we may incur may be limited by the terms of the Indenture governing our Senior Notes and our Credit Agreement. We continually evaluate expansion opportunities through acquisition of established regional homebuilders and such opportunities may require us to seek additional capital in the form of equity or debt financing from a variety of potential sources, including additional bank financing and/or securities offerings.

OUTLOOK:

Our increased earnings for the nine months ended June 30, 2000 and our current higher level of backlog make us optimistic about the prospect for increased earnings in fiscal 2000 compared to fiscal 1999. In addition, as a result of projected future increases in households and employment, we are optimistic about the long-term prospects for the US housing market. Further, we believe that a number of e-business initiatives that we are currently implementing will enhance our ability to take advantage of these prospects and will ultimately improve our profitability.

Cautionary Statement Pursuant to Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995:

This quarterly report on Form 10-Q contains "forward-looking statements" within the meaning of the federal securities laws. These forward-looking statements include, among others, statements concerning the Company's outlook for future quarters including projected earnings per share for fiscal 2000, overall and market specific volume trends, pricing trends and forces in the industry, cost reduction strategies and their results, the Company's expectations as to funding its capital expenditures and operations during 2000, and other statements of expectations, beliefs, future plans and strategies, anticipated events or trends, and similar expressions concerning matters that are not historical facts. The forward-looking statements in this report are subject to risks and uncertainties that could cause actual results to differ materially from those expressed in or implied by the statements. The most significant factors that could cause actual results to differ materially from those expressed in the forward-looking statements include, but are not limited to, the following:

•: Economic changes nationally or in one or more of the Company's local markets
•: Volatility of mortgage interest rates
•: Increased competition
•: Changes in the costs of winding down Premier Communities
•: Shortages of skilled labor or raw materials used in the production of houses
•: Increased prices for labor, land and raw materials used in the production of houses
•: Increased land development cost on projects under development
•: Any delays in reacting to changing consumer preference in home design
•: Delays or difficulties in implementing the Company's initiatives to reduce its production and overhead cost structure
•: Delays in land development or home construction resulting from adverse weather conditions
•: Potential delays or increased costs in obtaining necessary permits as a result of changes to laws, regulations or governmental policies.

Item 3: Quantitative and Qualitative Disclosures About Market Risk

There have been no changes since our Annual Report on Form 10-K for the year ended September 30, 1999.

PART II. Other Information

Item 6. Exhibits and Reports on Form 8-K

(a) Exhibits:

27 Financial Data Schedule

(b) Reports on Form 8-K:

We did not file any reports on Form 8-K during the quarter ended June 30, 2000.

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 thereunto duly authorized.

		BEAZER HOMES USA, INC.
DATE: AUGUST 11, 2000		By:	/s/ DAVID S. WEISS David S. Weiss Executive Vice President and Chief Financial Officer

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BEAZER HOMES USA, INC. FORM 10-Q
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BEAZER HOMES USA, INC. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
SIGNATURES

5 THIS SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM THE COMPANY'S QUARTERLY REPORT ON FORM 10-Q FOR THE QUARTER ENDED JUNE 30, 2000 AND IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000 3-MOS SEP-30-2000 APR-01-2000 JUN-30-2000 0 0 14,688 0 669,787 0 12,595 0 725,969 0 215,000 0 0 123 253,291 725,969 389,557 389,557 318,912 368,614 3,608 0 0 17,335 6,761 10,574 0 0 0 10,574 1.31 1.26 The Company presents a Condensed Balance Sheet.