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8K cover - Q2 Press Release


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 (Date of earliest reported event): May 2, 2012
 
 
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 260
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:
 
¨
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
 
¨
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
 
¨
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
 
¨
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 May 2, 2012, Beazer Homes USA, Inc. issued a press release announcing results of operations for the three and six months ended March 31, 2012. A copy of the press release is attached hereto as exhibit 99.1.

Item 9.01
Financial Statements and Exhibits
(d) Exhibits
 
99.1
Earnings Press Release dated May 2, 2012
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: May 2, 2012
 
 
 
By:
 
/s/ Robert L. Salomon
 
 
 
 
 
 
 
 
Robert L. Salomon
Executive Vice President and
Chief Financial Officer


Exhibit 99.1 Press Release



 
Exhibit 99.1
PRESS RELEASE

Beazer Homes Reports Second Quarter Fiscal 2012 Results

ATLANTA, May 2, 2012 - Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the quarter ended March 31, 2012.

“I was very pleased with our second quarter results,” said Allan Merrill, CEO of Beazer Homes. “We generated significant year-over-year increases in new home orders and home closings, reflecting both the initial operational benefits of our path-to-profitability strategies and gradually improving conditions in the housing market. We remain hopeful, but cautious, about the prospects for a sustained market recovery, as a number of factors continue to pose challenges for prospective homebuyers. Nevertheless, we are committed to taking the steps necessary to return to profitability as soon as possible.”


Summary results of the quarter are as follows:

As of March 31, 2012

•
Total cash and cash equivalents: $534.4 million, including unrestricted cash of approximately $257.0 million
•
Stockholders' equity: $218.4 million, not including $9.4 million of mandatory convertible subordinated notes, which automatically convert to common stock at maturity in 2013
•
Total backlog from continuing operations: 1,975 homes with a sales value of $465.0 million, compared to 1,396 homes with a sales value of $335.2 million as of March 31, 2011
•
Land and lots controlled: 25,617 lots (83.8% owned), a decrease of 17.1% from March 31, 2011


Quarter Ended March 31, 2012 - Results from Continuing Operations (unless otherwise specified)

•
Total new orders: 1,512 homes, a 29.0% increase from fiscal 2011
•
Cancellation rates: 22.5%, compared with 20.0% in fiscal 2011
•
Total home closings: 844 homes, a 49.9% increase from fiscal 2011
•
Revenue: $191.6 million, compared to $125.7 million in fiscal 2011
•
Average sales price from closings: $224.7 thousand, compared with $216.3 thousand in fiscal 2011
•
Gross profit margin: 10.5%, compared to (1.1)% in fiscal 2011. These margins were impacted by $1.2 million and $17.8 million in fiscal 2012 and fiscal 2011, respectively, for impairments and option contract abandonments.
•
Homebuilding gross profit margin, excluding impairments and abandonments: 10.9%, compared to 12.4% in fiscal 2011
•
Homebuilding gross profit margin, excluding impairments, abandonments and interest amortized to cost of sales: 17.5%, compared to 19.2% in fiscal 2011. Our margin this quarter benefited from approximately $3.2 million of bond reimbursements and product liability and warranty payment improvements. Excluding these items, our margin would have been 15.8%.
•
Net loss from continuing operations: $(37.9) million, or a diluted loss per share of $(0.48), including non-cash pre-tax charges of $1.2 million for inventory impairments and a loss on debt extinguishment of $2.7 million. This compared to a loss from continuing operations in the second quarter of fiscal 2011 of $(53.8) million, or $(0.73) per share, which included non-cash pre-tax charges of $17.8 million for inventory impairments.




•
Net Loss: $(39.9) million (including a loss from discontinued operations of $(2.1) million), compared with a net loss of $(53.8) million for fiscal 2011 (including income from discontinued operations of $0.02 million)
•
Total Company land and land development spending: $41.9 million, compared with $61.1 million in fiscal 2011



Conference Call

The Company will hold a conference call on May 2, 2012 at 10:00 am EDT to discuss these results. Interested parties may listen to the conference call and view the Company's slide presentation over the internet by visiting the “Investor Relations” section of the Company's website at www.beazer.com. To access the conference call by telephone, listeners should dial 800-619-8639. 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 800-839-5574 or 203-369-3669 and enter the passcode “3740” (available until 11:00 pm ET on May 9, 2012), or visit www.beazer.com. A replay of the webcast will be available at www.beazer.com for approximately 30 days.



Beazer Homes USA Inc., headquartered in Atlanta, Georgia, is one of the ten largest single-family homebuilders in the United States. The Company's industry-leading high performance homes are designed to lower the total cost of home ownership while reducing energy and water consumption. With award-winning floor-plans, the Company offers homes that incorporate exceptional value and quality to consumers in 16 states, including Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange and trades under the ticker symbol “BZH.”



Forward Looking Statements
This press release contains forward-looking statements. 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 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 final outcome of various putative class action lawsuits, multi-party suits and similar proceedings as well as the results of any other litigation or government proceedings and fulfillment of the obligations in the Deferred Prosecution Agreement and consent orders with governmental authorities and other settlement agreements; (ii) additional asset impairment charges or writedowns; (iii) economic changes nationally or in local markets, including changes in consumer confidence, declines in employment levels, volatility of mortgage interest rates and inflation; (iv) the effect of changes in lending guidelines and regulations and the uncertain availability of mortgage financing; (v) a slower economic rebound than anticipated, coupled with persistently high unemployment and additional foreclosures; (vi) continued or increased downturn in the homebuilding industry; (vii) estimates related to homes to be delivered in the future (backlog) are imprecise as they are subject to various cancellation risks which cannot be fully controlled, (viii) our cost of and ability to access capital and otherwise meet our ongoing liquidity needs including the impact of any downgrades of our credit ratings or reductions in our tangible net worth or liquidity levels; (ix) potential inability to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing; (x) increased competition or delays in reacting to changing consumer preference in home design; (xi) shortages of or increased prices for labor, land or raw materials used in housing production; (xii) factors affecting margins such as decreased land values underlying lot option agreements, increased land development costs on communities under development or delays or difficulties in implementing initiatives to reduce production and overhead cost structure; (xiii) the performance of our joint ventures and our joint venture partners; (xiv) the impact of construction defect and home warranty claims including those related to possible installation of drywall imported from China; (xv) the cost and availability of insurance and surety bonds; (xvi) delays in land development or home construction resulting from adverse weather conditions; (xvii) potential delays or increased costs in obtaining necessary permits and possible penalties for failure to comply with laws, regulations and governmental policies; (xviii) potential




exposure related to additional repurchase claims on mortgages and loans originated by Beazer Mortgage Corp.; (xix) estimates related to the potential recoverability of our deferred tax assets; (xx) effects of changes in accounting policies, standards, guidelines or principles; or (xxi) terrorist acts, acts of war and other factors over which the Company has little or no control.

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.
Carey Phelps
Director, Investor Relations & Corporate Communications
770-829-3700
investor.relations@beazer.com








-Tables Follow-    





 

 
 
BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
 
Three Months Ended
 
Six Months Ended
 
March 31,
 
March 31,
 
2012
 
2011
 
2012
 
2011
Total revenue
$
191,643

 
$
125,716

 
$
380,191

 
$
234,668

Home construction and land sales expenses
170,283

 
109,238

 
333,059

 
206,289

Inventory impairments and option contract abandonments
1,170

 
17,822

 
4,673

 
18,461

Gross profit (loss)
20,190

 
(1,344
)
 
42,459

 
9,918

Commissions
8,375

 
5,233

 
16,746

 
10,223

General and administrative expenses
26,319

 
36,068

 
54,513

 
68,571

Depreciation and amortization
3,190

 
2,062

 
5,593

 
3,967

Operating loss
(17,694
)
 
(44,707
)
 
(34,393
)
 
(72,843
)
Equity in income (loss) of unconsolidated joint ventures
4

 
71

 
(73
)
 
309

Loss on extinguishment of debt
(2,747
)
 
(102
)
 
(2,747
)
 
(3,004
)
Other expense, net
(18,265
)
 
(11,466
)
 
(36,538
)
 
(29,531
)
Loss from continuing operations before income taxes
(38,702
)
 
(56,204
)
 
(73,751
)
 
(105,069
)
Benefit from income taxes
(836
)
 
(2,426
)
 
(36,583
)
 
(3,019
)
Loss from continuing operations
(37,866
)
 
(53,778
)
 
(37,168
)
 
(102,050
)
(Loss) income from discontinued operations, net of tax
(2,082
)
 
23

 
(2,041
)
 
(513
)
Net loss
$
(39,948
)
 
$
(53,755
)
 
$
(39,209
)
 
$
(102,563
)
Weighted average number of shares:
 
 
 
 
 
 
 
Basic and Diluted
78,553

 
73,930

 
76,347

 
73,904

Basic and diluted loss per share:
 
 
 
 
 
 
 
Continuing Operations
$
(0.48
)
 
$
(0.73
)
 
$
(0.49
)
 
$
(1.38
)
Discontinued operations
$
(0.03
)
 
$
—

 
$
(0.02
)
 
$
(0.01
)
Total
$
(0.51
)
 
$
(0.73
)
 
$
(0.51
)
 
$
(1.39
)

 
 
Three Months Ended
 
Six Months Ended
 
March 31,
 
March 31,
 
2012
 
2011
 
2012
 
2011
Capitalized interest in inventory, beginning of period
$
46,510

 
$
43,433

 
$
45,973

 
$
36,884

Interest incurred
32,190

 
32,937

 
64,715

 
65,303

Capitalized interest impaired
(25
)
 
(1,409
)
 
(53
)
 
(1,409
)
Interest expense not qualified for capitalization and included as other expense
(18,797
)
 
(19,058
)
 
(37,914
)
 
(37,981
)
Capitalized interest amortized to house construction and land sales expenses
(12,636
)
 
(8,279
)
 
(25,479
)
 
(15,173
)
Capitalized interest in inventory, end of period
$
47,242

 
$
47,624

 
$
47,242

 
$
47,624






BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
 
 
March 31, 2012
 
September 30, 2011
ASSETS
 
 
 
 
Cash and cash equivalents
 
$
257,028

 
$
370,403

Restricted cash
 
277,395

 
277,058

Accounts receivable (net of allowance of $4,099 and $3,872, respectively)
 
21,701

 
28,303

Income tax receivable
 
2,399

 
4,823

Inventory
 
 
 
 
Owned inventory
 
1,191,572

 
1,192,380

Land not owned under option agreements
 
14,405

 
11,753

Total inventory
 
1,205,977

 
1,204,133

Investments in unconsolidated joint ventures
 
21,391

 
9,467

Deferred tax assets, net
 
6,145

 
2,760

Property, plant and equipment, net
 
21,895

 
22,613

Previously owned rental homes, net
 
18,980

 
11,347

Other assets
 
25,033

 
46,570

Total assets
 
$
1,857,944

 
$
1,977,477

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Trade accounts payable
 
$
54,947

 
$
72,695

Other liabilities
 
144,789

 
212,187

Obligations related to land not owned under option agreements
 
6,260

 
5,389

Total debt (net of discounts of $21,313 and $23,243, respectively)
 
1,433,582

 
1,488,826

Total liabilities
 
$
1,639,578

 
$
1,779,097

 
 
 
 
 
Stockholders’ equity:
 
 
 
 
Preferred stock (par value $.01 per share, 5,000,000 shares authorized, no shares issued)
 
$
—

 
$
—

Common stock (par value $0.001 per share, 180,000,000 shares authorized, 101,196,954 and 75,588,396 issued and outstanding, respectively)
 
101

 
76

Paid-in capital
 
683,920

 
624,750

Accumulated deficit
 
(465,655
)
 
(426,446
)
Total stockholders’ equity
 
218,366

 
198,380

Total liabilities and stockholders’ equity
 
$
1,857,944

 
$
1,977,477

 
 
 
 
 
Inventory Breakdown
 
 
 
 
Homes under construction
 
$
277,984

 
$
277,331

Development projects in progress
 
421,892

 
424,055

Land held for future development
 
386,280

 
384,761

Land held for sale
 
13,224

 
12,837

Capitalized interest
 
47,242

 
45,973

Model homes
 
44,950

 
47,423

Land not owned under option agreements
 
14,405

 
11,753

Total inventory
 
$
1,205,977

 
$
1,204,133




 




BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
 
 
Quarter Ended March 31,
 
Six Months Ended March 31,
SELECTED OPERATING DATA
 
2012
 
2011
 
2012
 
2011
Closings:
 
 
 
 
 
 
 
 
West region
 
369

 
181

 
739

 
397

East region
 
292

 
219

 
602

 
421

Southeast region
 
183

 
163

 
370

 
264

Continuing Operations
 
844

 
563

 
1,711

 
1,082

Discontinued Operations
 
1

 
20

 
16

 
50

Total closings
 
845


583

 
1,727

 
1,132

 
 
 
 
 
 
 
 
 
New orders, net of cancellations:
 
 
 
 
 
 
 
 
West region
 
655

 
417

 
958

 
591

East region
 
502

 
480

 
751

 
737

Southeast region
 
355

 
275

 
527

 
378

Continuing Operations
 
1,512

 
1,172

 
2,236

 
1,706

Discontinued Operations
 
(1
)
 
27

 
(1
)
 
46

Total new orders
 
1,511

 
1,199

 
2,235

 
1,752

 
 
 
 
 
 
 
 
 
Backlog units at end of period:
 
 
 
 
 
 
 
 
West region
 
789

 
463

 
789

 
463

East region
 
787

 
682

 
787

 
682

Southeast region
 
399

 
251

 
399

 
251

Continuing Operations
 
1,975

 
1,396

 
1,975

 
1,396

Discontinued Operations
 
—

 
20

 
—

 
20

Total backlog units
 
1,975

 
1,416

 
1,975

 
1,416

 
 
 
 
 
 
 
 
 
Dollar value of backlog at end of period (in millions)
 
$
465.0

 
$
339.6

 
$
465.0

 
$
339.6

 
 
 
 
 
 
 
 
 
Revenue (in thousands):
 
 
 
 
 
 
 
 
West region
 
$
77,857

 
$
36,791

 
$
148,634

 
$
76,339

East region
 
75,192

 
58,418

 
157,010

 
108,632

Southeast region
 
38,070

 
30,507

 
73,638

 
49,697

Pre-owned homes
 
524

 
—

 
909

 
—

Total revenue
 
$
191,643

 
$
125,716

 
$
380,191

 
$
234,668







 
 





BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
(Dollars in thousands)
 
 
Quarter Ended March 31,
 
Six Months Ended March 31,
SUPPLEMENTAL FINANCIAL DATA
 
2012
 
2011
 
2012
 
2011
Revenues:
 
 
 
 
 
 
 
 
Homebuilding
 
$
189,617

 
$
121,804

 
$
376,469

 
$
230,443

Land sales and other
 
2,026

 
3,912

 
3,722

 
4,225

Total
 
$
191,643

 
$
125,716

 
$
380,191

 
$
234,668

 
 
 
 
 
 
 
 
 
Gross profit (loss):
 
 
 
 
 
 
 
 
Homebuilding
 
$
19,467

 
$
(2,701
)
 
$
40,819

 
$
8,250

Land sales and other
 
723

 
1,357

 
1,640

 
1,668

Total
 
$
20,190

 
$
(1,344
)
 
$
42,459

 
$
9,918

Reconciliation of homebuilding gross profit before impairments and abandonments and interest amortized to cost of sales and the related gross margins to homebuilding gross profit (loss) and gross margin, the most directly comparable GAAP measure, is provided for each period discussed below:
 
Quarter Ended March 31,
 
Six Months Ended March 31,
 
2012
 
2011
 
2012
 
2011
Homebuilding gross profit (loss)
$
19,467

10.3
%
 
$
(2,701
)
(2.2
)%
 
$
40,819

10.8
%
 
$
8,250

3.6
%
Inventory impairments and lot option abandonments (I&A)
1,170

 
 
17,822

 
 
4,673

 
 
18,461

 
Homebuilding gross profit before I&A
20,637

10.9
%
 
15,121

12.4
 %
 
45,492

12.1
%
 
26,711

11.6
%
Interest amortized to cost of sales
12,636

 
 
8,279

 
 
25,479

 
 
15,173

 
Homebuilding gross profit before I&A and interest amortized to cost of sales
33,273

17.5
%
 
23,400

19.2
 %
 
70,971

18.9
%
 
41,884

18.2
%
Reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and impairments) to net income (loss), the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective capitalization, tax position and level of impairments.
 
 
 
Quarter Ended March 31,
 
Six Months Ended March 31,
 
 
2012
 
2011
 
2012
 
2011
Net loss
 
$
(39,948
)
 
$
(53,755
)
 
$
(39,209
)
 
$
(102,563
)
(Benefit) provision from Income Taxes
 
(850
)
 
(2,414
)
 
(36,996
)
 
(3,013
)
Interest amortized to home construction and land sales expenses, capitalized interest impaired, and interest expense not qualified for capitalization
 
31,458

 
28,746

 
63,446

 
54,563

Depreciation and amortization and stock compensation amortization
 
4,423

 
4,517

 
8,126

 
9,395

Inventory impairments and option contract abandonments
 
1,147

 
16,451

 
4,654

 
17,372

Joint venture impairment and abandonment charges
 
7

 
157

 
36

 
424

Adjusted EBITDA
 
$
(3,763
)
 
$
(6,298
)
 
$
57

 
$
(23,822
)