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: November 5, 2007
BEAZER
HOMES USA, INC.
(Exact
name of registrant as specified in its charter)
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DELAWARE
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001-12822
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54-2086934
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(State
or other jurisdiction
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(Commission
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(IRS
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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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:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17
CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act
(17 CFR
240.14d-2(b))
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o
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act
(17 CFR
240.13e-4(c))
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Item
2.02 Results of Operations
and Financial Condition.
On
November 5, 2007, Beazer Homes USA, Inc. (the “Company”) issued a press release
providing certain unaudited and preliminary fourth quarter financial and
operating data.
As
previously announced, the Company reported that its Audit Committee
determined it will be necessary for the Company to restate its financial
statements relating to fiscal years 2004 through 2006 and the interim periods
of
fiscal 2006 and fiscal 2007. As a result, the Company is not able at this
time
to report its financial results for the fourth quarter and fiscal year
2007. Nonetheless, the Company is providing these preliminary and
select estimates of financial and operating data, although the information
is
unaudited and is subject to change.
A
copy of
the press release is attached hereto as Exhibit 99.1 and incorporated herein
by
reference.
Item
2.06 Material
Impairments.
On
November 5, 2007, the Company also announced that, in light of continued
deterioration in the housing markets, it expects results for the fourth quarter
of fiscal 2007 to include non-cash pre-tax charges to abandon land option
contracts, to recognize inventory impairments and to record impairments and
land
option abandonments in joint ventures of approximately $230 million. In
addition, the Company is currently in the process of evaluating the
recoverability of its goodwill, which may result in impairment
charges.
Item
8.01 Other
Items.
On
November 5, 2007, the Company also announced that it has recently taken steps
to
further reduce its overall cost structure and improve operating
efficiencies. As a result, in October 2007, the Company further
reduced overall headcount by approximately 650 positions, or
25%. Since peak headcount levels in March 2006, overall headcount has declined by over
50% through reductions in
force and attrition. The Company expects these headcount reductions
to result in annualized cost savings of at least $30 million. In
addition, the Company has reorganized accounting and back-office functions
and
is centralizing a number of marketing initiatives to achieve additional
efficiencies.
The
Company also announced that its Board of Directors has voted to suspend the
Company’s quarterly dividend of $0.10 per share. The Board concluded
that this action, which will allow the Company to conserve approximately
$16
million of cash on an annual basis, is prudent in light of the continued
deterioration in the housing market at this time.
A
copy of
the press release is attached hereto as Exhibit 99.1 and incorporated herein
by
reference.
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Item
9.01 Financial
Statements and Exhibits
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(d)
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Exhibits
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99.1
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Press
Release issued November 5, 2007.
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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.
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BEAZER
HOMES USA, INC.
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Date:
November 6, 2007
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By:
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/s/Allan
P. Merrill
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Allan
P. Merrill
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Executive
Vice President and
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Chief
Financial Officer
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| Press Release | |
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For
Immediate Release
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Beazer
Homes Provides Certain Preliminary Fourth Quarter
Financial
and Operating Data
Company
Estimates Non-Cash Pre-Tax Inventory-Related Charges of Approximately
$230
Million
and Outlines Further Cost Reductions that are Expected to
Generate
Annual
Cost Savings of at Least $30 Million
Board
of Directors Approves Suspending Quarterly Dividend
ATLANTA,
November 5, 2007--
Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today provided certain
unaudited and preliminary fourth quarter financial and operating data and
also
announced further steps to reduce costs and improve operating efficiencies
in
response to continued deterioration in the housing market.
As
previously announced, the Company reported that its Audit Committee
determined it will be necessary for the Company to restate its financial
statements relating to fiscal years 2004 through 2006 and the interim periods
of
fiscal 2006 and fiscal 2007. As a result, the Company is not able to report
its
financial results for the fourth quarter and fiscal year 2007 at this
time. Nonetheless, the Company is providing certain preliminary
estimates of financial and operating data, although the information is unaudited
and is subject to change. The Company is working expeditiously to
complete the restatements and report audited financial results for the quarter
and year ended September 30, 2007 as soon as possible.
Also
as
previously disclosed, the Company has received waivers of events of default
under its revolving credit facility and two secured credit facilities arising
from the Company’s decision to restate its financial statements. It has also
received the necessary consents from the holders of its outstanding Senior
Notes
and Senior Convertible Notes to obtain a waiver of any and all defaults under
the Indentures that may have occurred or may occur on or prior to May 15,
2008
due to Beazer’s failure to file or deliver reports or other information as
required by the Securities and Exchange Commission.
Preliminary
Fourth Quarter Financial and Operating Data
As
previously disclosed, home closings for the quarter ended September 30, 2007,
totaled 3,940, a 39% decline from the same period in the prior fiscal
year. This resulted in a backlog conversion ratio of 66%, as the
Company remained focused on converting its existing backlog for cash generation.
Net new home orders totaled 973, a decline of 53% from the prior fiscal year,
driven largely by an unusually high cancellation rate (68%), which the Company
attributes in part to the pronounced tightening in the mortgage markets in
August and September.
The
Company significantly increased its cash position during its fiscal fourth
quarter. At September 30, 2007, the Company had a cash balance of $459.5
million, up from $128.8 million at June 30, 2007. Subsequently, the
Company has repaid approximately $75.0 million in secured debt, pledged $107.0
million to collateralize its outstanding letters of credit and paid a consent
fee to holders of its Senior Notes and Senior Convertible Notes and related
expenses totaling $21.0 million.
The
Company continues to reduce its land holdings and home inventories. The Company
controlled a total of 61,974 lots (59% owned and 41% optioned) at September
30,
2007, reflecting reductions of 14% compared to the level at June 30, 2007,
30%
compared to the level at September 30, 2006, and 42% compared to a peak level
at
December 31, 2005. As of September 30, 2007, unsold finished homes
and unsold homes under construction declined by 28% and 35%, respectively,
from
year-ago levels. 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 respect to investment in
inventory. For FY 2007 total land and land development expenditures
were approximately $835 million, representing a reduction of 42% from FY
2006. The Company currently expects land spending to be even further
reduced in FY 2008, based on current market conditions.
The
Company currently expects results for the fourth quarter of fiscal 2007 to
include non-cash pre-tax charges to abandon land option contracts, to recognize
inventory impairments and to record impairments and land option abandonments
in
joint ventures of approximately $230 million. In addition, the
Company is currently in the process of evaluating the recoverability of its
goodwill, which may result in impairment charges.
“The
housing industry continues to face the most difficult business conditions
in
over a decade,” said Ian J. McCarthy, President and Chief Executive
Officer. “We maintain the view that the long term fundamentals for
housing remain compelling and that our strategic initiatives to differentiate
Beazer Homes in the eyes of the consumer and to allocate capital and resources
in order to enhance long term shareholder value will position us well for
the
future. At the same time, we must continue to adapt to the realities
of the current market by remaining disciplined in our operating approach
and
continuing to focus on initiatives aimed at responding to what we believe
will
continue to be a challenging environment in the near term. These
initiatives include reductions in direct costs, overhead expenses and land
spending, and an intense focus on sales and marketing efforts to reduce unsold
home inventories, all with the aim of generating cash.”
Steps
to Reduce Costs and Improve Efficiencies
The
Company has recently taken steps to further reduce its overall cost structure
and improve operating efficiencies. In October 2007, the Company
reduced overall headcount by approximately 650 positions, or
25%. Since reaching peak headcount levels in March 2006, overall
headcount has declined by over 50% through reductions in force and
attrition. The Company expects these most recent headcount reductions
to result in annualized cost savings of at least $30 million. In
addition, the Company has reorganized accounting and back-office functions
and
is centralizing a number of marketing initiatives to achieve additional
efficiencies.
“With
recent industry data suggesting that market conditions may deteriorate further
before a recovery is underway, we need to adapt and further align our cost
structure and investment levels to expected lower volumes. While
these decisions are not taken lightly, they are necessary in order to maintain
our sound financial position,” said McCarthy.
Suspension
of Quarterly Dividend
The
Company also announced today that its Board of Directors voted to suspend
the
Company’s quarterly dividend of $0.10 per share. The Board concluded
that this action, which will allow the Company to conserve approximately
$16
million of cash on an annual basis, is prudent in light of the continued
deterioration in the housing market.
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.”
Forward-Looking
Statements
This
press release contains forward-looking statements within the meaning of the
Private Securities Litigation Reform Act of 1995. These forward-looking
statements represent our expectations or beliefs concerning future events,
and
it is possible that the results described in this press release will not
be
achieved. These forward-looking statements can generally be identified by
the
use of statements that include words such as “estimate,” “project,” “believe,”
“expect,” “anticipate,” “intend,” “plan,” “foresee,” “likely,” “will,” “goal,”
“target” or other similar words or phrases. These forward-looking
statements are subject to risks, uncertainties and other factors, many of
which
are outside of our control, that could cause actual results to differ materially
from the results discussed in the forward-looking statements, including,
among
other things, (i) the risk that additional information may arise from the
final
conclusions of the Audit Committee’s investigation, the preparation of the
Company’s restated financial statements, including the audit by our independent
auditors, or other subsequent events that would require us to make additional
adjustments; (ii) the risk that additional issues or matters may arise from
the
pending United States Attorney and the SEC investigations, or that additional
governmental proceedings may arise as a result of the matters subject to
the
Audit Committee’s investigation or additional issues or matters, and the timing,
final outcome and consequences of these proceedings, including the risk that
a
settlement of these proceedings may not be achievable without the payment
of
significant fines or penalties or the incurrence of significant sanctions;
(iii)
the timing, final outcome and consequences of the putative class action
lawsuits, derivative claims and similar proceedings, including the risk that
additional lawsuits, claims or proceedings may arise as a result of the matters
subject to the Audit Committee’s investigation and that the Company could be
subject to significant legal judgments, fines, penalties, settlements or
sanctions resulting therefrom; (iv) the risk that the Company may not be
able to
complete the restatement and commence timely filing its periodic reports
with
the SEC on or before May 15, 2008, which could result in a claim of default
by
the trustees under the indentures or the requisite bondholders and, if such
default were not cured or waived within the applicable 60-day grace period,
could result in an attempt by the trustee, the requisite bondholders or the
Company’s other lenders to accelerate the repayment of our outstanding debt
obligations; (v) any adverse effect on the Company’s business and the market
price of its securities arising from the continuing negative publicity related
to the restatement; (vi) any breach by the Company of the continued listing
requirements of the New York Stock Exchange causing the New York Stock Exchange
to initiate suspension or delisting procedures; (vii) the duration and severity
of adverse market conditions nationally and in local markets, including
prolonged credit tightening in the mortgage markets; (viii) volatility of
mortgage interest rates and inflation; (ix) increased competition; (x) shortages
of skilled labor or raw materials used in the production of houses; (xi)
increased prices for labor, land and raw materials used in the production
of
houses; (xii) increased land development costs on projects under development;
(xiii) the cost and availability of insurance, including the availability
of
insurance for the presence of mold; (xiv) the impact of construction defect
and
home warranty claims; (xv) potential delays or increased costs in obtaining
necessary permits as a result of changes to, or complying with, laws,
regulations or governmental policies; (xvi) the Company’s ability to maintain
sufficient cash and other liquid resources to meet its liquidity requirements;
and (xv) the risk that the Company’s credit ratings may be adversely affected
due to the restatement of the Company’s financial statements or continuing
adverse market conditions.
Any
forward-looking statement speaks only as of the date on which such statement
is
made, and, except as required by law, we do not undertake any obligation
to
update or revise any forward-looking statement, whether as a result of new
information, future events or otherwise. New factors emerge from time to
time
and it is not possible for management to predict all such
factors.
CONTACT:
Beazer Homes USA, Inc.
Leslie
H.
Kratcoski
Vice
President,
Investor
Relations & Corporate Communications
770-829-3700
lkratcos@beazer.com