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): August 3, 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 August 3, 2012, Beazer Homes USA, Inc. issued a press release announcing results of operations for the three and nine months ended June 30, 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 August 3, 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: August 3, 2012 | By: | /s/ Robert L. Salomon | ||||||
Robert L. Salomon Executive Vice President and Chief Financial Officer | ||||||||
Exhibit 99.1
PRESS RELEASE
Beazer Homes Reports Third Quarter Fiscal 2012 Results
ATLANTA, August 3, 2012 - Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the quarter ended June 30, 2012.
“I am very pleased with our third quarter results,” said Allan Merrill, CEO of Beazer Homes. “We generated improvement in new home orders, home closings and backlog, recording our fourth consecutive quarter of year-over-year increases in these metrics. This improvement reflects both the continuing operational benefits of our path-to-profitability strategies and gradually improving conditions in the housing market.
Subsequent to quarter-end, we successfully raised over $170 million in growth capital from concurrent equity and equity-linked offerings which we will use to reinvest in targeted markets. We also refinanced our 12% secured notes at a significantly lower cost which will save approximately $15 million per year. Taken together, we expect these actions to help accelerate our return to profitability.”
Summary results of the quarter are as follows:
Quarter Ended June 30, 2012 - Results from Continuing Operations (unless otherwise specified)
• | Total new orders: 1,555 homes, a 28.0% increase from fiscal 2011 |
• | Cancellation rates: 24.5%, compared with 24.3% in fiscal 2011 |
• | Total home closings: 1,109 homes, a 40.2% increase from fiscal 2011 |
• | Revenue: $254.6 million, compared to $172.8 million in fiscal 2011 |
• | Average sales price from closings: $227.3 thousand, compared with $213.0 thousand in fiscal 2011 |
• | Gross profit margin: 8.3%, compared to 8.0% in fiscal 2011. These margins were impacted by $5.8 million and $6.9 million in fiscal 2012 and fiscal 2011, respectively, for impairments and option contract abandonments. |
• | Homebuilding gross profit margin, excluding impairments and abandonments: 10.5%, compared to 11.1% in fiscal 2011 |
• | Homebuilding gross profit margin, excluding impairments, abandonments and interest amortized to cost of sales: 16.7%, compared to 17.8% in fiscal 2011. |
• | Net loss from continuing operations: $(38.1) million, or a diluted loss per share of $(0.38), including non-cash pre-tax charges of $5.8 million for inventory impairments. This compared to a loss from continuing operations in the third quarter of fiscal 2011 of $(55.8) million, or $(0.75) per share, which included non-cash pre-tax charges of $6.9 million for inventory impairments. |
• | Net Loss: $(39.9) million (including a loss from discontinued operations of $(1.8) million), compared with a net loss of $(59.1) million for fiscal 2011 (including loss from discontinued operations of $(3.4) million) |
• | Total Company land and land development spending: $40.5 million, compared with $54.2 million in fiscal 2011 |
Nine Months Ended June 30, 2012 - Results from Continuing Operations (unless otherwise specified)
• | Total new orders: 3,791 homes, a 29.8% increase from fiscal 2011 |
• | Cancellation rates: 26.0%, compared with 24.1% in fiscal 2011 |
• | Total home closings: 2,820 homes, a 50.6% increase from fiscal 2011 |
• | Revenue: $634.7 million, compared to $407.5 million in fiscal 2011 |
• | Average sales price from closings: $222.9 thousand, compared with $213.0 thousand in fiscal 2011 |
• | Gross profit margin: 10.0%, compared to 5.8% in fiscal 2011. These margins were impacted by $10.5 million and $25.3 million in fiscal 2012 and fiscal 2011, respectively, for impairments and option contract abandonments. |
• | Homebuilding gross profit margin, excluding impairments and abandonments was 11.4% for both periods |
• | Homebuilding gross profit margin, excluding impairments, abandonments and interest amortized to cost of sales was 18.0% for both periods |
• | Net loss from continuing operations: $(75.2) million, or a diluted loss per share of $(0.90), including non-cash pre-tax charges of $10.5 million for inventory impairments. This compared to a loss from continuing operations for the nine months ended in fiscal 2011 of $(157.8) million, or $(2.14) per share, which included non-cash pre-tax charges of $25.3 million for inventory impairments. |
• | Net Loss: $(79.1) million (including a loss from discontinued operations of $(3.9) million), compared with a net loss of $(161.7) million for fiscal 2011 (including loss from discontinued operations of $(3.9) million) |
• | Total Company land and land development spending: $140.6 million, compared with $178.0 million in fiscal 2011 |
As of June 30, 2012
• | Total cash and cash equivalents: $503.4 million, including unrestricted cash of approximately $231.6 million |
• | Stockholders' equity: $179.1 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: 2,421 homes with a sales value of $572.8 million, compared to 1,820 homes with a sales value of $431.2 million as of June 30, 2011 |
• | Land and lots controlled: 25,088 lots (84.2% owned), a decrease of 15.8% from June 30, 2011 |
Capital Raising Initiative
Subsequent to June 30, 2012, we engaged in several capital raising transactions designed to further strengthen our balance sheet and position us to better participate in the emerging housing recovery. We completed underwritten public offerings of 22 million shares of Beazer common stock at $2.90 per share and 4.6 million 7.50% tangible equity units and a private placement $300 million of 6.625% senior secured notes due 2018, generating net proceeds of approximately $466 million. A portion of these proceeds were used to fund the redemption of our $250 million 12% senior secured notes due 2017. The remaining funds will be used to fund an expansion in our new home community count in targeted markets and for general corporate purposes, including the repayment of outstanding indebtedness.
In addition, while we believe we possess sufficient liquidity to participate in a housing recovery, we are mindful of potential short-term, or seasonal, requirements for enhanced liquidity that may arise. As such, we have negotiated a commitment letter with four financial institutions for a proposed $150 million secured revolving credit agreement that we expect to finalize in the fourth quarter.
Conference Call
The Company will hold a conference call on August 3, 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 800-294-7483 or 203-369-3234 and enter the passcode “3740” (available until 11:00 pm ET on August 10, 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.
Jeff Hoza
Vice President and Treasurer
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 | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Total revenue | $ | 254,555 | $ | 172,829 | $ | 634,746 | $ | 407,497 | |||||||
Home construction and land sales expenses | 227,505 | 152,124 | 560,564 | 358,413 | |||||||||||
Inventory impairments and option contract abandonments | 5,819 | 6,870 | 10,492 | 25,331 | |||||||||||
Gross profit | 21,231 | 13,835 | 63,690 | 23,753 | |||||||||||
Commissions | 10,776 | 7,843 | 27,522 | 18,066 | |||||||||||
General and administrative expenses | 27,867 | 38,571 | 82,380 | 107,142 | |||||||||||
Depreciation and amortization | 3,743 | 2,660 | 9,336 | 6,627 | |||||||||||
Operating loss | (21,155 | ) | (35,239 | ) | (55,548 | ) | (108,082 | ) | |||||||
Equity in income (loss) of unconsolidated entities | 48 | 63 | (25 | ) | 372 | ||||||||||
Gain (loss) on extinguishment of debt | — | 95 | (2,747 | ) | (2,909 | ) | |||||||||
Other expense, net | (16,804 | ) | (17,085 | ) | (53,342 | ) | (46,616 | ) | |||||||
Loss from continuing operations before income taxes | (37,911 | ) | (52,166 | ) | (111,662 | ) | (157,235 | ) | |||||||
Provision for (benefit from) income taxes | 145 | 3,589 | (36,438 | ) | 570 | ||||||||||
Loss from continuing operations | (38,056 | ) | (55,755 | ) | (75,224 | ) | (157,805 | ) | |||||||
Loss from discontinued operations, net of tax | (1,828 | ) | (3,365 | ) | (3,869 | ) | (3,878 | ) | |||||||
Net loss | $ | (39,884 | ) | $ | (59,120 | ) | $ | (79,093 | ) | $ | (161,683 | ) | |||
Weighted average number of shares: | |||||||||||||||
Basic and Diluted | 99,050 | 73,982 | 83,887 | 73,930 | |||||||||||
Basic and diluted loss per share: | |||||||||||||||
Continuing Operations | $ | (0.38 | ) | $ | (0.75 | ) | $ | (0.90 | ) | $ | (2.14 | ) | |||
Discontinued operations | $ | (0.02 | ) | $ | (0.05 | ) | $ | (0.04 | ) | $ | (0.05 | ) | |||
Total | $ | (0.40 | ) | $ | (0.80 | ) | $ | (0.94 | ) | $ | (2.19 | ) | |||
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Capitalized interest in inventory, beginning of period | $ | 47,242 | $ | 47,624 | $ | 45,973 | $ | 36,884 | |||||||
Interest incurred | 31,235 | 32,872 | 95,950 | 98,175 | |||||||||||
Capitalized interest impaired | (222 | ) | (380 | ) | (275 | ) | (1,789 | ) | |||||||
Interest expense not qualified for capitalization and included as other expense | (17,233 | ) | (17,707 | ) | (55,147 | ) | (55,688 | ) | |||||||
Capitalized interest amortized to house construction and land sales expenses | (15,649 | ) | (11,179 | ) | (41,128 | ) | (26,352 | ) | |||||||
Capitalized interest in inventory, end of period | $ | 45,373 | $ | 51,230 | $ | 45,373 | $ | 51,230 | |||||||
BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
June 30, 2012 | September 30, 2011 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 231,616 | $ | 370,403 | ||||
Restricted cash | 271,782 | 277,058 | ||||||
Accounts receivable (net of allowance of $2,194 and $3,872, respectively) | 25,010 | 28,303 | ||||||
Income tax receivable | 2,398 | 4,823 | ||||||
Inventory | ||||||||
Owned inventory | 1,186,817 | 1,192,380 | ||||||
Land not owned under option agreements | 14,078 | 11,753 | ||||||
Total inventory | 1,200,895 | 1,204,133 | ||||||
Investments in unconsolidated entities | 41,587 | 9,467 | ||||||
Deferred tax assets, net | 6,245 | 2,760 | ||||||
Property, plant and equipment, net | 20,849 | 22,613 | ||||||
Previously owned rental homes, net | — | 11,347 | ||||||
Other assets | 26,366 | 46,570 | ||||||
Total assets | $ | 1,826,748 | $ | 1,977,477 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Trade accounts payable | $ | 73,473 | $ | 72,695 | ||||
Other liabilities | 125,764 | 212,187 | ||||||
Obligations related to land not owned under option agreements | 6,029 | 5,389 | ||||||
Total debt (net of discounts of $20,348 and $23,243, respectively) | 1,442,407 | 1,488,826 | ||||||
Total liabilities | $ | 1,647,673 | $ | 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, 101,116,819 and 75,588,396 issued and outstanding, respectively) | 101 | 76 | ||||||
Paid-in capital | 684,513 | 624,750 | ||||||
Accumulated deficit | (505,539 | ) | (426,446 | ) | ||||
Total stockholders’ equity | 179,075 | 198,380 | ||||||
Total liabilities and stockholders’ equity | $ | 1,826,748 | $ | 1,977,477 | ||||
Inventory Breakdown | ||||||||
Homes under construction | $ | 316,117 | $ | 277,331 | ||||
Development projects in progress | 384,991 | 424,055 | ||||||
Land held for future development | 386,353 | 384,761 | ||||||
Land held for sale | 10,852 | 12,837 | ||||||
Capitalized interest | 45,373 | 45,973 | ||||||
Model homes | 43,131 | 47,423 | ||||||
Land not owned under option agreements | 14,078 | 11,753 | ||||||
Total inventory | $ | 1,200,895 | $ | 1,204,133 | ||||
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
Quarter Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
SELECTED OPERATING DATA | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Closings: | ||||||||||||||||
West region | 455 | 273 | 1,194 | 670 | ||||||||||||
East region | 382 | 311 | 984 | 732 | ||||||||||||
Southeast region | 272 | 207 | 642 | 471 | ||||||||||||
Continuing Operations | 1,109 | 791 | 2,820 | 1,873 | ||||||||||||
Discontinued Operations | 3 | 23 | 19 | 73 | ||||||||||||
Total closings | 1,112 | 814 | 2,839 | 1,946 | ||||||||||||
New orders, net of cancellations: | ||||||||||||||||
West region | 730 | 447 | 1,688 | 1,038 | ||||||||||||
East region | 486 | 466 | 1,237 | 1,203 | ||||||||||||
Southeast region | 339 | 302 | 866 | 680 | ||||||||||||
Continuing Operations | 1,555 | 1,215 | 3,791 | 2,921 | ||||||||||||
Discontinued Operations | 3 | 31 | 2 | 77 | ||||||||||||
Total new orders | 1,558 | 1,246 | 3,793 | 2,998 | ||||||||||||
Backlog units at end of period: | ||||||||||||||||
West region | 1,064 | 637 | 1,064 | 637 | ||||||||||||
East region | 891 | 837 | 891 | 837 | ||||||||||||
Southeast region | 466 | 346 | 466 | 346 | ||||||||||||
Continuing Operations | 2,421 | 1,820 | 2,421 | 1,820 | ||||||||||||
Discontinued Operations | — | 28 | — | 28 | ||||||||||||
Total backlog units | 2,421 | 1,848 | 2,421 | 1,848 | ||||||||||||
Dollar value of backlog at end of period (in millions) | $ | 572.8 | $ | 437.9 | $ | 572.8 | $ | 437.9 | ||||||||
Homebuilding Revenue (in thousands): | ||||||||||||||||
West region | $ | 97,356 | $ | 53,549 | $ | 245,420 | $ | 128,885 | ||||||||
East region | 98,850 | 76,226 | 255,519 | 182,367 | ||||||||||||
Southeast region | 55,865 | 38,669 | 127,601 | 87,635 | ||||||||||||
Total revenue | $ | 252,071 | $ | 168,444 | $ | 628,540 | $ | 398,887 | ||||||||
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
(Dollars in thousands)
Quarter Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
SUPPLEMENTAL FINANCIAL DATA | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues: | ||||||||||||||||
Homebuilding | $ | 252,071 | $ | 168,444 | $ | 628,540 | $ | 398,887 | ||||||||
Land sales and other | 2,484 | 4,385 | 6,206 | 8,610 | ||||||||||||
Total | $ | 254,555 | $ | 172,829 | $ | 634,746 | $ | 407,497 | ||||||||
Gross profit: | ||||||||||||||||
Homebuilding | $ | 20,656 | $ | 11,877 | $ | 61,475 | $ | 20,127 | ||||||||
Land sales and other | 575 | 1,958 | 2,215 | 3,626 | ||||||||||||
Total | $ | 21,231 | $ | 13,835 | $ | 63,690 | $ | 23,753 | ||||||||
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 and gross margin, the most directly comparable GAAP measure, is provided for each period discussed below:
Quarter Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||
Homebuilding gross profit | $ | 20,656 | 8.2 | % | $ | 11,877 | 7.1 | % | $ | 61,475 | 9.8 | % | $ | 20,127 | 5.0 | % | |||||||
Inventory impairments and lot option abandonments (I&A) | 5,819 | 6,870 | 10,492 | 25,331 | |||||||||||||||||||
Homebuilding gross profit before I&A | 26,475 | 10.5 | % | 18,747 | 11.1 | % | 71,967 | 11.4 | % | 45,458 | 11.4 | % | |||||||||||
Interest amortized to cost of sales | 15,649 | 11,179 | 41,128 | 26,352 | |||||||||||||||||||
Homebuilding gross profit before I&A and interest amortized to cost of sales | 42,124 | 16.7 | % | 29,926 | 17.8 | % | 113,095 | 18.0 | % | 71,810 | 18.0 | % | |||||||||||
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 June 30, | Nine Months Ended June 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net loss | $ | (39,884 | ) | $ | (59,120 | ) | $ | (79,093 | ) | $ | (161,683 | ) | ||||
(Benefit) provision from Income Taxes | 150 | 3,592 | (36,846 | ) | 579 | |||||||||||
Interest amortized to home construction and land sales expenses, capitalized interest impaired, and interest expense not qualified for capitalization | 33,104 | 29,266 | 96,550 | 83,829 | ||||||||||||
Depreciation and amortization and stock compensation amortization | 4,456 | 4,237 | 12,582 | 13,632 | ||||||||||||
Inventory impairments and option contract abandonments | 6,142 | 8,984 | 10,796 | 26,356 | ||||||||||||
Joint venture impairment and abandonment charges | — | 163 | 36 | 587 | ||||||||||||
Adjusted EBITDA | $ | 3,968 | $ | (12,878 | ) | $ | 4,025 | $ | (36,700 | ) | ||||||