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: November 7, 2006
BEAZER
HOMES USA, INC.
(Exact
name of registrant as specified in its charter)
|
DELAWARE
|
001-12822
|
54-2086934
|
|
(State
or other jurisdiction of incorporation)
|
(Commission
File Number)
|
(IRS
Employer Identification No.)
|
1000
Abernathy Road, Suite 1200
Atlanta
Georgia 30328
(Address
of Principal
Executive
Offices)
(770)
829-3700
(Registrant's
telephone number, including area code)
None
(Former
name or former address, if changed since last report)
Check
the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
o
Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
o
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
o
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange
Act
(17 CFR 240.14d-2(b))
o
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act
(17 CFR 240.13e-4(c))
Item
2.02 Results of Operations and Financial Condition
On
November 7, 2006, Beazer Homes USA, Inc. reported earnings and results of
operations for the quarter ended September 30, 2006. A copy of this press
release is attached hereto as exhibit 99.1. For
additional information, please see the press release.
Item
9.01 Financial Statements and Exhibits.
(d)
Exhibits
| 99.1 |
Press release issued November 7,
2006.
|
2
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:
November 7, 2006
|
By:/s/
James
O’Leary
|
|
James O’Leary
|
|
|
Executive Vice President and Chief Financial
Officer
|
3
Exhibit
99.1
|
Press
Release
For
Immediate Release
|
Beazer
Homes Reports Fourth Quarter and FY 2006 Financial Results
ATLANTA,
November 7, 2006
--
Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com)
today
announced results for the quarter and fiscal year ended September 30, 2006.
Highlights of both the quarter and fiscal year ended September 30, 2006,
compared to the same periods of the prior year, are as follows:
Quarter
Ended September 30, 2006
| n |
Net
income of $91.9 million, or $2.19 per diluted share, compared to
net
income of $164.4 million, or $3.61 per diluted share in the prior
year’s
fourth quarter.
|
| n |
Home
closings: 6,411 homes, compared to 6,339 in the prior
year.
|
| n |
Total
revenues: $1.88 billion, compared to $1.81 billion in the prior
year.
|
| n |
Operating
income margin: 8.0%, compared to 14.1% in the prior year.
|
| n |
New
orders: 2,064 homes, compared to 4,937 in the prior
year.
|
| n |
Repurchased
557,400 shares for approximately $22.1
million.
|
Year
Ended September 30, 2006
| n |
Net
income of $388.8 million, or $8.89 per diluted share, compared to
reported
net income of $262.5 million, or $5.87 per diluted share, and adjusted
net
income of $392.8, or $8.72 per diluted share in FY 2005.
|
| n |
Home
closings: 18,669 compared to 18,146 in the prior
year.
|
| n |
Total
revenues: $5.46 billion, compared to $5.00 billion in the prior year.
|
| n |
Operating
income margin: 11.2% compared 9.7% on a reported basis and 12.4%
on an
adjusted basis in FY 2005.
|
| n |
New
orders: 14,538 compared to 18,923 in the prior
year.
|
| n |
Backlog
at 9/30/06: 5,102 homes with a sales value of $1.56 billion, compared
to
9,233 homes with a sales value $2.72 billion in the prior
year.
|
| n |
Repurchased
3.65 million shares for approximately $205.4
million.
|
| n |
Year-end
net debt-to-capitalization ratio as of 9/30/06:
49.5%
|
“Beazer
Homes had record fourth quarter closings and revenues in fiscal 2006 as we
focused on converting our existing backlog in what remains a challenging housing
market,” said President and Chief Executive Officer, Ian J. McCarthy. “Despite
our strong close of fiscal 2006, most markets across the country continue to
experience higher levels of resale home inventories, lower levels of demand
for
new homes, significant increases in cancellation rates and significantly higher
discounting. As it is difficult to predict the duration of these factors, we
have proactively taken steps to align our overhead structure and capital
spending with our expectations for a reduced level of home closings in fiscal
2007. We believe this disciplined commitment to profitability and prudent
capital allocation, coupled with our broad geographic and product diversity,
will position us well for the continuing difficult market environment and the
eventual upturn. We continue to believe that the long-term industry
fundamentals, based on demographic driven demand and employment trends, together
with further supply constraints, remain compelling.”
Total
home closings of 6,411 in the quarter were 1% above the prior year’s record
quarter as decreased closings in Florida and the Mid-Atlantic were offset by
increases in the West, Southeast and Other homebuilding segments. Net new home
orders totaled 2,064 homes for the quarter, a decline of 58% from the fourth
quarter of the prior year, resulting from both reduced demand across the
company’s markets and a significantly higher rate of cancellations from the
prior year.
“We
remain focused on reducing costs and efficiently allocating capital in this
challenging business environment,” said James O’Leary, Executive Vice President
and Chief Financial Officer. “During September and October, we undertook a
comprehensive review of our overhead structure in light of our reduced volume
expectations for fiscal 2007, bringing our overall headcount down by
approximately 1,000 positions, or 25%. We also reduced our controlled lot
count by over 15% during the fourth quarter by eliminating non-strategic
positions to align our land supply with our current expectations for home
closings. These steps are intended to maintain our sound balance sheet and
strong financial position so that we can capitalize on those future
opportunities that will generate meaningfully higher returns
prospectively.”
Operating
margin declined to 8.0% in the fourth quarter as a result of a higher percentage
of closings from lower margin markets, higher market driven sales incentives
and
costs associated with overhead structure realignment and exiting of land
positions. These results included pre-tax charges of approximately $18.2 million
to write off land options and exit positions that were no longer providing
sufficient returns and $5.6 million to recognize inventory impairments.
The company also incurred approximately $1.1 million in severance costs during
the fourth quarter of fiscal 2006 related to the alignment of its overhead
structure.
During
the fourth quarter of fiscal 2006, the company repurchased 557,400 shares of
its
common stock for $22.1 million under its 10 million share repurchase
authorization. For fiscal year 2006, the company repurchased 3,648,300 shares
for $205.4 million. At September 30, net debt to total capitalization stood
at
49.5%, and the company had no outstanding borrowings under its primary revolving
credit facility.
Fiscal
2007 Outlook
The
company previously announced that it anticipates home closings in the range
of
12,000 - 13,500 in fiscal 2007. It expects new orders in the range of 12,000
-
14,000 for this period. The attainment of closings and new orders in these
ranges assumes the resumption of positive year-over-year sales comparisons
at
varying levels by the last quarter of the 2007 fiscal year.
Achievement
of the company’s fiscal 2007 forecast of 13,500 closings is expected to result
in diluted earnings per share of approximately $3.65. This forecast assumes
a
stabilization of average gross margins during fiscal 2007 at or near the levels
attained in the fiscal 2006 fourth quarter. The company has not provided a
diluted earnings per share estimate for the 12,000 unit level of closings as
there is insufficient visibility to assess the level of margins, the potential
for additional impairments, or further overhead reductions required at this
volume level.
The
company expects to close approximately 2,500 homes during the quarter ending
December 31, 2006. During this quarter, the company also expects to incur
approximately $4.0 million of additional severance and related costs associated
with the previously referenced overhead alignment.
During
this period, the Company is focused on maintaining balance sheet strength,
reducing costs, and maximizing its financial resources to better position the
company to take advantage of those opportunities that will arise when conditions
stabilize. The steps taken in September and October to align the company’s
cost structure with the current environment are consistent with the company’s
goal to be in the top quartile of its peer group with respect to margins and
returns.
Conference
Call
The
company will hold a conference call today, November 7, 2006, at 11:00 AM ET
to
discuss the results and take questions. You may listen to the conference call
and view the company’s slide presentation over the internet by going to the
“Investor Relations” section of the company’s website at www.beazer.com.
To
access the conference call by telephone, listeners should dial 800-369-1904.
To
be admitted to the call, verbally supply the passcode "BZH". A replay of the
call will be available shortly after the conclusion of the live call. To
directly access the replay, dial 866-480-3542 (available until 5:00 PM ET on
November 14, 2006), or visit www.beazer.com.
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, New Mexico, New York, North Carolina, Ohio, Pennsylvania, South
Carolina, Tennessee, Texas, Virginia and West Virginia and also provides
mortgage origination and title services to its homebuyers. Beazer Homes, a
Fortune 500 company, is listed on the New York Stock Exchange under the ticker
symbol “BZH.”
Use
of Non-GAAP Financial Information
In
addition to the results in this press release reported in accordance with
generally accepted accounting principles in the United States (“GAAP”), the
company has provided information regarding adjusted operating income margin,
net
income and earnings per share which excludes the effects of the non-cash
goodwill impairment charge recorded during the second quarter of fiscal 2005.
Management believes that these adjusted financial results are useful to both
management and investors in the analysis of the Company’s financial performance
when comparing it to prior periods and that they provide investors with an
important perspective on the current underlying operating performance of the
business by isolating the impact of a non-cash adjustment related to a previous
acquisition.
Below
is
a reconciliation of these non-GAAP financial measures to the most directly
comparable financial measures calculated and presented in accordance with GAAP:
|
|
|
|||
|
|
Twelve
Months Ended
September
30,
2005
|
|||
|
|
||||
|
(in
thousands, except per share data)
|
|
|||
|
|
|
|||
|
Reported
operating income
|
$
|
486,918
|
||
|
Total
revenues
|
$
|
4,995,353
|
||
|
Reported
operating income margin
|
9.7
|
%
|
||
|
|
||||
|
Adjusted
operating income margin
|
||||
|
Reported
operating income
|
$
|
486,918
|
||
|
Goodwill
impairment loss
|
130,235
|
|||
|
Operating
income, excluding goodwill impairment loss
|
$
|
617,153
|
||
|
Operating
income margin, excluding goodwill impairment loss
|
12.4
|
%
|
||
|
|
||||
|
Reported
net income
|
$
|
262,524
|
||
|
Reported
net income per common share
|
$
|
5.87
|
||
|
|
||||
|
Adjusted
Net Income and Earnings Per Share:
|
||||
|
Reported
net income
|
$
|
262,524
|
||
|
Goodwill
impairment loss
|
130,235
|
|||
|
Net
income, excluding goodwill impairment loss
|
$
|
392,759
|
||
|
|
||||
|
After-tax
interest add-back to pro-forma net income for
|
||||
|
'if
converted' treatment of convertible notes in
|
||||
|
calculation
of diluted net income per common share
|
$
|
5,325
|
||
|
|
||||
|
Diluted
net income per common share, excluding
|
$
|
8.72
|
||
|
goodwill
impairment loss
|
||||
|
|
||||
|
Diluted
weighted average shares outstanding
|
45,634
|
|||
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, changes
in levels of customer demand, fluctuations in interest rates, increases in
raw
materials and labor costs, levels of competition, implementation of overhead
realignments and associated costs, potential liability as a result of
construction defect, product liability and warranty claims, and other factors
described in the company’s Annual Report on Form 10-K/A for the year ended
September 30, 2005 filed with the Securities and Exchange Commission on May
25,
2006.
| Contact: |
Leslie
H. Kratcoski
Vice
President, Investor Relations & Corporate Communications
(770)
829-3764
lkratcos@beazer.com
|
-Tables
Follow-
|
BEAZER
HOMES USA, INC.
|
|||||||||
|
CONSOLIDATED
OPERATING AND FINANCIAL DATA
|
|||||||||
|
(Dollars
in thousands, except per share
amounts)
|
FINANCIAL
DATA
|
Quarter
Ended
|
Year
Ended
|
||||||||||||
|
September
30,
|
September
30,
|
||||||||||||
|
2006
|
2005
|
2006
|
2005
|
||||||||||
|
STATEMENT
OF INCOME
|
|||||||||||||
|
Total
revenue
|
$
|
1,883,758
|
$
|
1,814,051
|
$
|
5,462,003
|
$
|
4,995,353
|
|||||
|
Home
construction and land sales expenses
|
1,519,705
|
1,367,189
|
4,201,318
|
3,823,300
|
|||||||||
|
Gross
profit
|
364,053
|
446,862
|
1,260,685
|
1,172,053
|
|||||||||
|
|
|||||||||||||
|
Selling,
general and administrative expenses
|
212,727
|
191,345
|
649,010
|
554,900
|
|||||||||
|
Goodwill
impairment charge
|
-
|
-
|
-
|
130,235
|
|||||||||
|
Operating
income
|
151,326
|
255,517
|
611,675
|
486,918
|
|||||||||
|
Equity
in income (loss) of unconsolidated joint ventures
|
(1,581
|
)
|
1,871
|
(772
|
)
|
5,021
|
|||||||
|
Other
income (loss)
|
(4,854
|
)
|
2,408
|
2,311
|
7,395
|
||||||||
|
|
|||||||||||||
|
Income
before income taxes
|
144,891
|
259,796
|
613,214
|
499,334
|
|||||||||
|
Income
taxes
|
53,018
|
95,372
|
224,453
|
236,810
|
|||||||||
|
Net
income
|
$
|
91,873
|
$
|
164,424
|
$
|
388,761
|
$
|
262,524
|
|||||
|
|
|||||||||||||
|
Net
income per common share:
|
|||||||||||||
|
Basic
|
$
|
2.39
|
$
|
4.04
|
$
|
9.76
|
$
|
6.49
|
|||||
|
Diluted
|
$
|
2.19
|
$
|
3.61
|
$
|
8.89
|
$
|
5.87
|
|||||
|
|
|||||||||||||
|
|
|||||||||||||
|
Weighted
average shares outstanding, in thousands:
|
|||||||||||||
|
Basic
|
38,420
|
40,669
|
39,812
|
40,468
|
|||||||||
|
Diluted
|
42,627
|
45,935
|
44,345
|
45,634
|
|||||||||
|
|
|||||||||||||
|
Interest
incurred
|
$
|
35,770
|
$
|
25,409
|
$
|
120,965
|
$
|
89,678
|
|||||
|
Interest
amortized to cost of sales
|
$
|
35,454
|
$
|
27,508
|
$
|
96,242
|
$
|
82,388
|
|||||
|
EPS
interest add back - Convertible Debt
|
$
|
1,329
|
$
|
1,332
|
$
|
5,367
|
$
|
5,325
|
|||||
|
Depreciation
and amortization
|
$
|
6,960
|
$
|
5,863
|
$
|
26,057
|
$
|
21,174
|
|||||
|
|
|||||||||||||
|
SELECTED
BALANCE SHEET DATA
|
September
30,
|
September
30,
|
|||||||||||
|
|
2006
|
2005
|
|||||||||||
|
Cash
|
$
|
172,443
|
$
|
297,098
|
|||||||||
|
Inventory
|
3,520,332
|
2,901,165
|
|||||||||||
|
Total
assets
|
4,559,431
|
3,770,516
|
|||||||||||
|
Total
debt (net of discount of $3,578 and $4,118)
|
1,838,660
|
1,321,936
|
|||||||||||
|
Shareholders'
equity
|
1,701,923
|
1,504,688
|
|||||||||||
|
BEAZER
HOMES USA, INC.
|
|||||||||
|
CONSOLIDATED
OPERATING AND FINANCIAL DATA
|
|||||||||
|
(Dollars
in thousands)
|
|||||||||
OPERATING
DATA
|
Quarter
Ended
|
Year
Ended
|
||||||||||||
|
September
30,
|
September
30,
|
||||||||||||
|
SELECTED
OPERATING DATA
|
2006
|
2005
|
2006
|
2005
|
|||||||||
|
Closings:
|
|||||||||||||
|
West
region
|
1,741
|
1,714
|
5,035
|
5,686
|
|||||||||
|
Mid-Atlantic
region
|
654
|
695
|
2,086
|
1,870
|
|||||||||
|
Florida
region
|
899
|
1,002
|
2,274
|
2,236
|
|||||||||
|
Southeast
region
|
1,471
|
1,382
|
4,289
|
3,995
|
|||||||||
|
Other
homebuilding
|
1,646
|
1,546
|
4,985
|
4,359
|
|||||||||
|
Total
closings
|
6,411
|
6,339
|
18,669
|
18,146
|
|||||||||
|
New
orders, net of cancellations:
|
|||||||||||||
|
West
region
|
417
|
1,200
|
3,216
|
5,673
|
|||||||||
|
Mid-Atlantic
region
|
209
|
434
|
1,470
|
2,016
|
|||||||||
|
Florida
region
|
70
|
696
|
1,523
|
2,295
|
|||||||||
|
Southeast
region
|
541
|
1,313
|
3,856
|
4,372
|
|||||||||
|
Other
homebuilding
|
827
|
1,294
|
4,473
|
4,567
|
|||||||||
|
Total
new orders
|
2,064
|
4,937
|
14,538
|
18,923
|
|||||||||
|
Backlog
units at end of period:
|
|||||||||||||
|
West
region
|
1,175
|
2,994
|
|||||||||||
|
Mid-Atlantic
region
|
577
|
1,193
|
|||||||||||
|
Florida
region
|
508
|
1,259
|
|||||||||||
|
Southeast
region
|
1,321
|
1,754
|
|||||||||||
|
Other
homebuilding
|
1,521
|
2,033
|
|||||||||||
|
Total
backlog units
|
5,102
|
9,233
|
|||||||||||
|
Dollar
value of backlog at end of period
|
$
|
1,555,456
|
$
|
2,721,744
|
|||||||||
|
BEAZER
HOMES USA, INC.
|
|||||||||
|
CONSOLIDATED
OPERATING AND FINANCIAL DATA (Continued)
|
|||||||||
|
(Dollars
in thousands)
|
|||||||||
|
Quarter
Ended
|
Year
Ended
|
||||||||||||
|
September
30,
|
September
30,
|
||||||||||||
|
SUPPLEMENTAL
FINANCIAL DATA:
|
2006
|
2005
|
2006
|
2005
|
|||||||||
|
Revenues
|
|||||||||||||
|
Homebuilding
operations
|
$
|
1,833,942
|
$
|
1,796,491
|
$
|
5,325,588
|
$
|
4,922,793
|
|||||
|
Land
and lot sales
|
26,098
|
4,760
|
90,217
|
34,527
|
|||||||||
|
Financial
Services
|
29,303
|
18,438
|
65,808
|
54,310
|
|||||||||
|
Intercompany
elimination
|
(5,585
|
)
|
(5,638
|
)
|
(19,610
|
)
|
(16,277
|
)
|
|||||
|
Total
revenues
|
$
|
1,883,758
|
$
|
1,814,051
|
$
|
5,462,003
|
$
|
4,995,353
|
|||||
|
Gross
Profit
|
|||||||||||||
|
Homebuilding
operations
|
$
|
334,557
|
$
|
429,135
|
$
|
1,195,991
|
$
|
1,112,670
|
|||||
|
Land
and lot sales
|
193
|
(711
|
)
|
(1,114
|
)
|
5,073
|
|||||||
|
Financial
Services
|
29,303
|
18,438
|
65,808
|
54,310
|
|||||||||
|
Total
gross profit
|
$
|
364,053
|
$
|
446,862
|
$
|
1,260,685
|
$
|
1,172,053
|
|||||
|
Selling,
general and administrative
|
|||||||||||||
|
Homebuilding
operations
|
$
|
195,178
|
$
|
178,653
|
$
|
600,428
|
$
|
516,217
|
|||||
|
Financial
Services
|
17,549
|
12,692
|
48,582
|
38,683
|
|||||||||
|
Total
selling, general and administrative
|
$
|
212,727
|
$
|
191,345
|
$
|
649,010
|
$
|
554,900
|
|||||
|
|
|||||||||||||
|
|
|||||||||||||
|
SELECTED
SEGMENT INFORMATION
|
|||||||||||||
|
Revenue:
|
|||||||||||||
|
West
region
|
$
|
643,738
|
$
|
612,516
|
$
|
1,874,118
|
$
|
1,946,822
|
|||||
|
Mid-Atlantic
region
|
300,887
|
347,199
|
965,874
|
848,083
|
|||||||||
|
Florida
region
|
272,902
|
281,709
|
694,803
|
598,950
|
|||||||||
|
Southeast
region
|
319,053
|
272,298
|
900,663
|
761,030
|
|||||||||
|
Other
homebuilding
|
323,460
|
287,529
|
980,347
|
802,435
|
|||||||||
|
Financial
services
|
29,303
|
18,438
|
65,808
|
54,310
|
|||||||||
|
Intercompany
elimination
|
(5,585
|
)
|
(5,638
|
)
|
(19,610
|
)
|
(16,277
|
)
|
|||||
|
Total
revenue
|
$
|
1,883,758
|
$
|
1,814,051
|
$
|
5,462,003
|
$
|
4,995,353
|
|||||
|
|
|||||||||||||
|
Operating
income
|
|||||||||||||
|
West
region
|
$
|
69,410
|
$
|
123,770
|
$
|
280,731
|
$
|
421,968
|
|||||
|
Mid-Atlantic
region
|
57,327
|
95,364
|
213,279
|
206,627
|
|||||||||
|
Florida
region
|
56,696
|
55,696
|
143,380
|
97,263
|
|||||||||
|
Southeast
region
|
34,425
|
18,006
|
86,451
|
49,098
|
|||||||||
|
Other
homebuilding
|
215
|
(2,614
|
)
|
(4,301
|
)
|
5,902
|
|||||||
|
Financial
services
|
11,754
|
5,746
|
17,226
|
15,627
|
|||||||||
|
Segment
operating income
|
229,827
|
295,968
|
736,766
|
796,485
|
|||||||||
|
Corporate
and unallocated
|
(78,501
|
)
|
(40,451
|
)
|
(125,091
|
)
|
(309,567
|
)
|
|||||
|
Total
operating income
|
$
|
151,326
|
$
|
255,517
|
$
|
611,675
|
$
|
486,918
|
|||||