UNITED
STATES
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
26, 2007
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
April
26, 2007, Beazer Homes USA, Inc. reported earnings and results of operations
for
the quarter ended March 31, 2007. A copy of the 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 April 26, 2007.
|
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.
|
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||
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Date:
April 26, 2007
|
By:
|
/s/
Ian J. McCarthy
|
|
|
|
|
Ian
J. McCarthy
|
|
|
|
|
President
and Chief Executive Officer
|
|
Exhibit
99.1
PRESS
RELEASE
FOR
IMMEDIATE
RELEASE
Beazer
Homes Reports Fiscal Second Quarter 2007 Financial Results
ATLANTA,
April 26, 2007-- Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com)
today announced financial results for the quarter ended March 31, 2007. Summary
results of the quarter are as follows:
Quarter
Ended March 31, 2007
| n |
Reported
net loss of $(43.1) million, or $(1.12) per share, including charges
related to inventory impairments, impairments from joint ventures,
and
abandonment of land option contracts totaling $86.9 million on a
pre-tax
basis. Excluding charges for inventory impairments, impairments of
investments in joint ventures and abandonment of land option contracts,
adjusted net income was $11.2 million, or $0.30 per diluted share.
For the
second quarter of the prior year, net income was $104.4 million,
or $2.35
per diluted share.
|
| n |
Home
closings: 2,743 homes, compared to 4,273 in the second quarter of
the
prior year.
|
| n |
Total
revenues: $826.3 million, compared to $1.27 billion in the second
quarter
of the prior year.
|
| n |
New
orders: 4,085 homes, compared to 4,224 in the second quarter of the
prior
year.
|
| n |
Lots
under control totaled 79,528 at 3/31/07, a 24% decline from the prior
year.
|
| n |
Unsold
finished homes and total unsold homes declined 47% and 20%, respectively
from the first quarter of fiscal 2007.
|
| n |
Net
debt to capitalization was 49.1% as of
3/31/07.
|
| n |
Backlog
at 3/31/07: 5,563 homes with a sales value of $1.67 billion compared
to
9,227 homes with a sales value of $2.79 billion in the prior
year.
|
“We
continued to experience extremely challenging operating conditions during
our
second quarter of fiscal 2007” said President and Chief Executive Officer, Ian
J. McCarthy. “Most housing markets across the country continue to experience
lower levels of demand coupled with higher levels of inventory, resulting
in
increased competition and continued significant discounting. While we were
pleased with the level of new orders we achieved this quarter, at this point
in
the traditional spring selling season we still have yet to see any meaningful
evidence of a sustainable recovery in the housing market, and we expect current
conditions will continue to put pressure on homebuilders’ operating results.”
Total
home closings of 2,743 during the second quarter of fiscal 2007 were 36%
below
the prior fiscal year’s second quarter record. Net new home orders totaled 4,085
homes for the quarter, a decline of 3% from the second quarter record of
the
prior fiscal year. The cancellation rate for the second quarter was 29%,
compared to 33% in the prior year’s second quarter. The cancellation rate was
also lower sequentially from 43% in the first quarter of fiscal
2007.
“During
the second quarter, we continued to focus on initiatives aimed at strengthening
our financial capabilities and positioning ourselves for a significantly
more
competitive environment as we entered the spring selling season. These
initiatives include ongoing comprehensive reviews of our direct costs,
converting existing backlog into closings and reducing unsold home inventories
through integrated national marketing and promotion efforts,” McCarthy
continued. “We believe this disciplined approach, coupled with our broad
geographic and product diversity, positions us well for the continuing difficult
market environment and the eventual upturn. We maintain that the long-term
industry fundamentals, based on demographic driven demand and employment
trends,
together with further supply constraints, remain compelling.”
The
Company remains focused on reducing costs throughout the business and
maintaining a strong balance sheet and liquidity during the challenging business
environment, in an effort to position the Company to capitalize on future
opportunities which will arise when the housing market recovers. The Company
has
proactively reduced its controlled lot count by over 24% compared to March
of
the prior year. The Company remains committed to aligning its land supply
and
inventory levels to current expectations for home closings, and continues
to
exercise caution and discipline with regard to land and land development
spending.
During
the second quarter, margins continued to be negatively impacted by both higher
levels of discounting and reduced revenue volume as compared to the same
period
a year ago. In addition, the Company incurred pre-tax charges to abandon
land
option contracts, to recognize inventory impairments, and to record impairments
in investments in joint ventures of $19.1 million, $60.8 million, and $7.1
million, respectively. The results for the second quarter also included a
$6.0
million reduction of the warranty accrual for the remediation of homes in
connection with the Trinity Homes class action settlement in October 2004,
based on a reduction in the estimated remaining remediation costs.
United
States Attorney Inquiry and Outstanding Litigation
As
previously disclosed, Beazer Homes has received a subpoena from the United
States Attorney’s office in the Western District of North Carolina, seeking the
production of documents focusing on the Company’s mortgage origination services
and, together with certain of its subsidiaries and current and former officers,
has been named as a defendant in a putative securities class action lawsuit
and
a putative homeowner class action lawsuit. The Company has also recently
learned
that a second punitative homeowner class action lawsuit has been filed in
South
Carolina and that it has been named as a nominal defendant in a shareholder
derivative complaint filed against certain of its current and former executive
officers and directors claiming violations of Section 10(b) of the Securities
Exchange Act of 1934 and Rule 10b-5 and breaches of fiduciary duty based
on
matters related to the Company’s mortgage origination business. The Company is
cooperating with the United States Attorney and the document production request
and intends to vigorously defend each of the lawsuits. The Audit Committee
of
the Beazer Homes Board of Directors has initiated an internal review of Beazer
Homes’ mortgage origination business and related matters and has retained
independent legal counsel and an independent financial consultant to assist
with
that review. The U.S. Attorney inquiry and the related internal review by
the
Audit Committee and the three lawsuits are in their early stages. At this
time,
the Company cannot predict the outcome of these matters or the length of
time it
will take to resolve them.
Fiscal
2007 Outlook
The
current housing market environment continues to be characterized by lower
demand
and higher inventories, with heavy discounting needed to drive meaningful
sales
volume. Given current market conditions, and the low visibility as to when
conditions may improve, the Company is not comfortable at this time updating
its
earnings per share outlook for fiscal 2007 and is withdrawing its
previously-issued outlook.
During
this period, the Company will focus on maintaining balance sheet strength,
continue to reduce costs, and maximize its financial resources to better
position the Company to take advantage of those opportunities that will arise
when conditions stabilize. Steps taken to date 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, April 26 2007, at 10:00 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 888-405-9176.
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 888-562-4353 (available until 5:00 PM ET
on May
3, 2007), 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, 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 net income and earnings
per
share which excludes the effects of charges for inventory impairments,
impairments in investments in joint ventures and abandonment of land option
contracts recorded during the second quarters of fiscal 2007 and fiscal 2006.
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 non-cash charges related to inventory
valuation.
Below
is
a reconciliation of these non-GAAP financial measures for the quarters ended
March 31, 2007 and March 31, 2006 to the most directly comparable financial
measures calculated and presented in accordance with GAAP:
|
Quarter
Ended March 31, 2007
|
Quarter
Ended March 31, 2006
|
||||||
|
(in
thousands, except per share data)
|
|||||||
|
Reported
net (loss) income
|
$
|
(43,089
|
)
|
$
|
104,351
|
||
|
Reported
net (loss) income per common share
|
($1.12
|
)
|
$
|
2.35
|
|||
|
Adjusted
Net Income and Earnings Per Share:
|
|||||||
|
Reported
net (loss) income
|
$
|
(43,089
|
)
|
$
|
104,351
|
||
|
After-tax
charges for inventory impairments, impairments of investments
in joint
ventures
|
|||||||
|
and
abandonment of land option contracts
|
54,334
|
6,002
|
|||||
|
Adjusted
net income, excluding charges for inventory impairments, impairments
in
joint ventures
|
|||||||
|
and
abandonment of land option contracts
|
$
|
11,245
|
$
|
110,353
|
|||
|
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
|
$
|
1,347
|
$
|
1,347
|
|||
|
Adjusted
diluted net income per common share, excluding charges for inventory
impairments,
|
|||||||
|
impairments
in joint ventures and abandonment of land option contracts
|
$
|
0.30
|
$
|
2.48
|
|||
|
Diluted
weighted average shares outstanding
|
42,651
|
45,066
|
|||||
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, the outcome of
the
U.S. Attorney inquiry and related internal review, the class action lawsuits,
derivative claims and similar proceedings and other factors described in
the
Company’s Annual Report on Form 10-K for the year ended September 30, 2006 filed
with the Securities and Exchange Commission on December 8, 2006 and other
reports filed from time to time with the Securities and Exchange Commission.
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
|
Six
Months Ended
|
||||||||||||
|
March
31,
|
March
31,
|
||||||||||||
|
2007
|
2006
|
2007
|
2006
|
||||||||||
|
INCOME
STATEMENT
|
|||||||||||||
|
Total
revenue
|
$
|
826,295
|
$
|
1,269,091
|
$
|
1,629,309
|
$
|
2,374,707
|
|||||
|
Home
construction and land sales expenses
|
701,029
|
944,992
|
1,363,011
|
1,774,851
|
|||||||||
|
Inventory
impairments and option contract abandonments
|
79,854
|
9,604
|
199,777
|
12,531
|
|||||||||
|
Gross
profit
|
45,412
|
314,495
|
66,521
|
587,325
|
|||||||||
|
Selling,
general and administrative expenses
|
109,729
|
149,793
|
225,097
|
282,871
|
|||||||||
|
Operating
(loss) income
|
(64,317
|
)
|
164,702
|
(158,576
|
)
|
304,454
|
|||||||
|
Equity
in (loss) income of unconsolidated joint ventures
|
(7,692
|
)
|
330
|
(10,052
|
)
|
682
|
|||||||
|
Other
income, net
|
2,694
|
1,582
|
4,687
|
5,685
|
|||||||||
|
(Loss)
income before income taxes
|
(69,315
|
)
|
166,614
|
(163,941
|
)
|
310,821
|
|||||||
|
(Benefit)
provision for income taxes
|
(26,226
|
)
|
62,263
|
(61,846
|
)
|
116,557
|
|||||||
|
Net
(loss) income
|
$
|
(43,089
|
)
|
$
|
104,351
|
$
|
(102,095
|
)
|
$
|
194,264
|
|||
|
Net
(loss) income per common share:
|
|||||||||||||
|
Basic
|
$
|
(1.12
|
)
|
$
|
2.58
|
$
|
(2.66
|
)
|
$
|
4.77
|
|||
|
Diluted
|
$
|
(1.12
|
)
|
$
|
2.35
|
$
|
(2.66
|
)
|
$
|
4.34
|
|||
|
Weighted
average shares outstanding, in thousands:
|
|||||||||||||
|
Basic
|
38,427
|
40,442
|
38,353
|
40,703
|
|||||||||
|
Diluted
|
38,427
|
45,066
|
38,353
|
45,395
|
|||||||||
|
Interest
incurred
|
$
|
35,091
|
$
|
27,903
|
$
|
69,394
|
$
|
53,436
|
|||||
|
Interest
amortized to cost of sales
|
$
|
29,427
|
$
|
20,542
|
$
|
49,542
|
$
|
38,717
|
|||||
|
EPS
interest add back - Convertible Debt
|
n/a
|
$
|
1,347
|
n/a
|
$
|
2,691
|
|||||||
|
Depreciation
and amortization
|
$
|
2,650
|
$
|
6,332
|
$
|
8,929
|
$
|
11,042
|
|||||
|
SELECTED
BALANCE SHEET DATA
|
March
31,
|
September
30,
|
March
31,
|
||||||||||
|
2007
|
2006
|
2006
|
|||||||||||
|
Cash
|
$
|
224,482
|
$
|
172,443
|
$
|
15,183
|
|||||||
|
Inventory
|
3,371,581
|
3,520,332
|
3,481,162
|
||||||||||
|
Total
assets
|
4,191,024
|
4,559,431
|
4,111,743
|
||||||||||
|
Total
debt (net of discount of $3,302, $3,578 and $3,883)
|
1,762,473
|
1,838,660
|
1,514,069
|
||||||||||
|
Shareholders'
equity
|
1,603,135
|
1,701,923
|
1,576,943
|
||||||||||
|
Inventory
Breakdown
|
|||||||||||||
|
Homes
under construction
|
$
|
1,186,280
|
$
|
1,368,056
|
$
|
1,468,443
|
|||||||
|
Development
projects in progress
|
1,647,947
|
1,623,819
|
1,569,384
|
||||||||||
|
Unimproved
land held for future development
|
12,095
|
12,213
|
63,922
|
||||||||||
|
Model
homes
|
62,963
|
44,803
|
42,891
|
||||||||||
|
Consolidated
inventory not owned
|
462,296
|
471,441
|
336,522
|
||||||||||
|
$
|
3,371,581
|
$
|
3,520,332
|
$
|
3,481,162
|
||||||||
|
BEAZER
HOMES USA, INC.
|
||||||||||||||||
|
CONSOLIDATED
OPERATING AND FINANCIAL DATA
|
||||||||||||||||
|
(Dollars
in thousands)
|
||||||||||||||||
|
OPERATING
DATA
|
||||||||||||||||
|
Quarter
Ended
|
Six
Months Ended
|
|||||||||||||||
|
March
31,
|
March
31,
|
|||||||||||||||
|
SELECTED
OPERATING DATA
|
2007
|
2006
|
2007
|
2006
|
||||||||||||
|
Closings:
|
||||||||||||||||
|
West
region
|
674
|
1,246
|
1,403
|
2,257
|
||||||||||||
|
Mid-Atlantic
region
|
209
|
502
|
407
|
955
|
||||||||||||
|
Florida
region
|
349
|
536
|
595
|
1,013
|
||||||||||||
|
Southeast
region
|
729
|
919
|
1,408
|
1,785
|
||||||||||||
|
Other
homebuilding
|
782
|
1,070
|
1,590
|
2,092
|
||||||||||||
|
Total
closings
|
2,743
|
4,273
|
5,403
|
8,102
|
||||||||||||
|
New
orders, net of cancellations:
|
||||||||||||||||
|
West
region
|
1,054
|
862
|
1,497
|
1,938
|
||||||||||||
|
Mid-Atlantic
region
|
559
|
517
|
795
|
800
|
||||||||||||
|
Florida
region
|
441
|
418
|
534
|
1,073
|
||||||||||||
|
Southeast
region
|
1,016
|
1,148
|
1,479
|
2,020
|
||||||||||||
|
Other
homebuilding
|
1,015
|
1,279
|
1,559
|
2,265
|
||||||||||||
|
Total
new orders
|
4,085
|
4,224
|
5,864
|
8,096
|
||||||||||||
|
Backlog
units at end of period:
|
||||||||||||||||
|
West
region
|
1,269
|
2,675
|
||||||||||||||
|
Mid-Atlantic
region
|
965
|
1,038
|
||||||||||||||
|
Florida
region
|
447
|
1,319
|
||||||||||||||
|
Southeast
region
|
1,392
|
1,989
|
||||||||||||||
|
Other
homebuilding
|
1,490
|
2,206
|
||||||||||||||
|
Total
backlog units
|
5,563
|
9,227
|
||||||||||||||
|
Dollar
value of backlog at end of period
|
$
|
1,669,949
|
$
|
2,793,519
|
||||||||||||
|
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:
|
2007
|
2006
|
2007
|
2006
|
|||||||||
|
Revenues
|
|||||||||||||
|
Homebuilding
operations
|
$
|
777,140
|
$
|
1,239,859
|
$
|
1,559,136
|
$
|
2,313,286
|
|||||
|
Land
and lot sales
|
41,539
|
20,596
|
54,206
|
45,551
|
|||||||||
|
Financial
Services
|
11,226
|
13,135
|
22,969
|
24,113
|
|||||||||
|
Intercompany
elimination
|
(3,610
|
)
|
(4,499
|
)
|
(7,002
|
)
|
(8,243
|
)
|
|||||
|
Total
revenues
|
$
|
826,295
|
$
|
1,269,091
|
$
|
1,629,309
|
$
|
2,374,707
|
|||||
|
Gross
profit
|
|||||||||||||
|
Homebuilding
operations
|
$
|
36,054
|
$
|
299,226
|
$
|
41,356
|
$
|
561,376
|
|||||
|
Land
and lot sales
|
(1,868
|
)
|
2,134
|
2,196
|
1,836
|
||||||||
|
Financial
Services
|
11,226
|
13,135
|
22,969
|
24,113
|
|||||||||
|
Total
gross profit
|
$
|
45,412
|
$
|
314,495
|
$
|
66,521
|
$
|
587,325
|
|||||
|
Selling,
general and administrative
|
|||||||||||||
|
Homebuilding
operations
|
$
|
100,549
|
$
|
139,605
|
$
|
207,404
|
$
|
262,000
|
|||||
|
Financial
Services
|
9,180
|
10,188
|
17,693
|
20,871
|
|||||||||
|
Total
selling, general and administrative
|
$
|
109,729
|
$
|
149,793
|
$
|
225,097
|
$
|
282,871
|
|||||
|
SELECTED
SEGMENT INFORMATION
|
|||||||||||||
|
Revenue:
|
|||||||||||||
|
West
region
|
$
|
266,722
|
$
|
471,854
|
$
|
564,629
|
$
|
840,446
|
|||||
|
Mid-Atlantic
region
|
102,366
|
233,108
|
194,594
|
432,614
|
|||||||||
|
Florida
region
|
106,409
|
167,769
|
197,654
|
313,350
|
|||||||||
|
Southeast
region
|
183,626
|
188,969
|
338,755
|
365,902
|
|||||||||
|
Other
homebuilding
|
159,556
|
198,755
|
317,710
|
406,525
|
|||||||||
|
Financial
services
|
11,226
|
13,135
|
22,969
|
24,113
|
|||||||||
|
Intercompany
elimination
|
(3,610
|
)
|
(4,499
|
)
|
(7,002
|
)
|
(8,243
|
)
|
|||||
|
Total
revenue
|
$
|
826,295
|
$
|
1,269,091
|
$
|
1,629,309
|
$
|
2,374,707
|
|||||
|
|
|||||||||||||
|
Operating
(loss) income
|
|||||||||||||
|
West
region
|
$
|
(20,607
|
)
|
$
|
87,242
|
$
|
(47,111
|
)
|
$
|
150,981
|
|||
|
Mid-Atlantic
region
|
(17,221
|
)
|
53,115
|
(20,472
|
)
|
102,616
|
|||||||
|
Florida
region
|
6,773
|
38,256
|
(21,720
|
)
|
68,887
|
||||||||
|
Southeast
region
|
14,705
|
10,573
|
23,139
|
26,676
|
|||||||||
|
Other
homebuilding
|
(16,846
|
)
|
(7,131
|
)
|
(32,554
|
)
|
(6,411
|
)
|
|||||
|
Financial
services
|
2,046
|
2,947
|
5,276
|
3,242
|
|||||||||
|
Segment
operating (loss) income
|
(31,150
|
)
|
185,002
|
(93,442
|
)
|
345,991
|
|||||||
|
Corporate
and unallocated
|
(33,167
|
)
|
(20,300
|
)
|
(65,134
|
)
|
(41,537
|
)
|
|||||
|
Total
operating (loss) income
|
$
|
(64,317
|
)
|
$
|
164,702
|
$
|
(158,576
|
)
|
$
|
304,454
|
|||