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8K cover - 3.31.14 Press Release


__________________________________________________________________________________________
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 (Date of earliest reported event): May 1, 2014
 
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 1, 2014, Beazer Homes USA, Inc. issued a press release announcing results of operations for the three and six months ended March 31, 2014. 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 1, 2014




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 1, 2014
 
 
 
By:
 
/s/ Kenneth F. Khoury
 
 
 
 
 
 
 
 
Kenneth F. Khoury Executive Vice President, Chief Administrative Officer and General Counsel


Exhibit 99.1 - 3.31.14


  
Exhibit 99.1
PRESS RELEASE

Beazer Homes Reports Second Quarter Fiscal 2014 Results; Affirms Expectation of Net Income for Fiscal 2014 and Increases Full Year Adjusted EBITDA Guidance

ATLANTA, May 1, 2014 - Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the quarter and six months ended March 31, 2014.

"Despite inclement weather and a slower start to the spring selling season than anticipated, we made further progress on our operational and financial objectives during the quarter," said Allan Merrill, President and CEO of Beazer Homes. "We exceeded our expectations for sales per community, increased gross margins, improved adjusted EBITDA and invested heavily for our long-term growth. These results allow us to reaffirm our confidence in delivering full year profitability in Fiscal 2014 and in making substantial progress on our multi-year "2B-10" target this year."

On its earnings conference call today, the Company intends to update its full year Fiscal 2014 expectations for several operational and financial metrics, including increasing the Company’s guidance for year-over-year growth in Adjusted EBITDA. The Company now expects growth in Adjusted EBITDA of at least $45 million compared to Fiscal Year 2013.

Summary results for the quarter and six months ended March 31, 2014 are as follows:

Q2 Results from Continuing Operations (unless otherwise specified)
 
 
Quarter Ended March 31,
 
 
2014
 
2013
 
Change
New Home Orders
 
1,390

 
1,521

 
(8.6
)%
Orders per month per community
 
3.3

 
3.4

 
(2.9
)%
LTM orders per month per community
 
2.9

 
2.7

 
7.4
 %
Cancellation rates
 
19.4
%
 
18.7
%
 
70 bps

 
 
 
 
 
 
 
Total Home Closings
 
977

 
1,127

 
(13.3
)%
Average sales price from closings (in thousands)
 
$
272.4

 
$
253.3

 
7.5
 %
Homebuilding revenue (in millions)
 
$
266.1

 
$
285.5

 
(6.8
)%
Homebuilding gross profit margin, excluding impairments and abandonments (I&A)
 
19.7
%
 
15.9
%
 
380 bps

Homebuilding gross profit margin, excluding I&A and interest amortized to cost of sales
 
22.5
%
 
19.1
%
 
340 bps

 
 
 
 
 
 
 
Loss from continuing operations before income taxes (in millions)
 
$
(8.3
)
 
$
(19.5
)
 
$
11.2

Benefit from income taxes (in millions)
 
$
0.1

 
$
0.3

 
$
(0.2
)
Net loss from continuing operations (in millions)
 
$
(8.2
)
 
$
(19.1
)
 
$
10.9

Basic Loss Per Share
 
$
(0.32
)
 
$
(0.78
)
 
$
0.46

Land and land development spending (in millions)
 
$
128.6

 
$
62.6

 
$
66.0

Total Company Adjusted EBITDA (in millions)
 
$
18.5

 
$
15.2

 
$
3.3






 
 
Six Months Ended March 31,
 
 
2014
 
2013
 
Change
New Home Orders
 
2,285

 
2,453

 
(6.8
)%
LTM orders per month per community
 
2.9

 
2.7

 
7.4
 %
Cancellation rates
 
20.4
%
 
21.8
%
 
-140 bps

 
 
 
 
 
 
 
Total Home Closings
 
2,015

 
2,165

 
(6.9
)%
Average sales price from closings (in thousands)
 
$
276.0

 
$
244.8

 
12.7
 %
Homebuilding revenue (in millions)
 
$
556.1

 
$
529.9

 
4.9
 %
Homebuilding gross profit margin, excluding impairments and abandonments (I&A)
 
19.2
%
 
15.3
%
 
390 bps

Homebuilding gross profit margin, excluding I&A and interest amortized to cost of sales
 
21.9
%
 
18.7
%
 
320 bps

 
 
 
 
 
 
 
Loss from continuing operations before income taxes (in millions)
 
$
(12.2
)
 
$
(38.6
)
 
$
26.4

Benefit from income taxes (in millions)
 
$
—

 
$
0.6

 
$
(0.6
)
Net loss from continuing operations (in millions)
 
$
(12.2
)
 
$
(38.1
)
 
$
25.9

Basic Loss Per Share
 
$
(0.48
)
 
$
(1.55
)
 
$
1.07

Land and land development spending (in millions)
 
$
252.4

 
$
152.6

 
$
99.8

Total Company Adjusted EBITDA (in millions)
 
$
40.2

 
$
23.0

 
$
17.2



As of March 31, 2014

•
Total cash and cash equivalents: $350.4 million, including unrestricted cash of approximately $299.6 million
•
Stockholders' equity: $230.8 million
•
Total backlog from continuing operations: 2,163 homes with a sales value of $637.1 million, compared to 2,211 homes with a sales value of $584.2 million as of March 31, 2013
•
Land and lots controlled: 29,331 lots (80.9% owned), an increase of 18.8% from March 31, 2013 (includes 246 lots obtained through a non-cash distribution of our Las Vegas joint venture)

Conference Call

The Company will hold a conference call on May 1, 2014 at 10:00 am ET 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 (for international callers, dial 312-470-7002). 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 888-662-6653 or 402-220-6417 and enter the passcode “3740” (available until 11 pm ET on May 8, 2014), or visit www.beazer.com. A replay of the webcast will be available at www.beazer.com for at least 30 days.

Headquartered in Atlanta, Beazer Homes is one of the country's 10 largest single-family homebuilders. The Company's homes meet or exceed the benchmark for energy-efficient home construction as established by ENERGY STAR® and are designed with Choice Plans to meet the personal preferences and lifestyles of its buyers. In addition, the Company is committed to providing a range of preferred lender choices to facilitate transparent competition between lenders and enhanced customer service. The Company offers homes 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 under the ticker symbol “BZH.” For more info visit Beazer.com, or check out Beazer on Facebook and Twitter.

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 availability and cost of land and the risks associated with the future value of our inventory such as additional asset impairment charges or writedowns; (ii) economic changes nationally or in local markets, including changes in consumer confidence, declines in employment levels, inflation and increases in the quantity and decreases in the price of new homes and resale homes in the market; (iii) the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; (iv) 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; (v) shortages of or increased prices for labor, land or raw materials used in housing production; (vi) 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; (vii) our ability to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing; (viii) a substantial increase in mortgage interest rates, increased disruption in the availability of mortgage financing, a change in tax laws regarding the deductibility of mortgage interest, or an increased number of foreclosures; (ix) increased competition or delays in reacting to changing consumer preference in home design; (x) factors affecting margins such as decreased land values underlying land option agreements, increased land development costs on communities under development or delays or difficulties in implementing initiatives to reduce production and overhead cost structure; (xi) estimates related to the potential recoverability of our deferred tax assets; (xii) potential delays or increased costs in obtaining necessary permits as a result of changes to, or complying with, laws, regulations, or governmental policies and possible penalties for failure to comply with such laws, regulations and governmental policies; (xiii) the results of litigation or government proceedings and fulfillment of the obligations in the Deferred Prosecution Agreement and consent orders with governmental authorities and other settlement agreements; (xiv) the impact of construction defect and home warranty claims; (xv) the cost and availability of insurance and surety bonds; (xvi) the performance of our unconsolidated entities and our unconsolidated entity partners; (xvii) delays in land development or home construction resulting from adverse weather conditions; (xviii) the impact of information technology failures or data security breaches; (xix) effects of changes in accounting policies, standards, guidelines or principles; or (xx) 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,
 
2014
 
2013
 
2014
 
2013
Total revenue
$
270,021

 
$
287,902

 
$
563,191

 
$
534,804

Home construction and land sales expenses
216,969

 
241,992

 
455,438

 
452,606

Inventory impairments and option contract abandonments
880

 
2,025

 
911

 
2,229

Gross profit
52,172

 
43,885

 
106,842

 
79,969

Commissions
11,096

 
11,686

 
22,917

 
22,328

General and administrative expenses
32,628

 
28,795

 
61,038

 
55,123

Depreciation and amortization
2,831

 
3,093

 
5,738

 
5,808

Operating income (loss)
5,617

 
311

 
17,149

 
(3,290
)
Equity in (loss) income of unconsolidated entities
(17
)
 
68

 
302

 
104

Loss on extinguishment of debt
(153
)
 
(3,638
)
 
(153
)
 
(3,638
)
Other expense, net
(13,727
)
 
(16,195
)
 
(29,484
)
 
(31,822
)
Loss from continuing operations before income taxes
(8,280
)
 
(19,454
)
 
(12,186
)
 
(38,646
)
Benefit from income taxes
(56
)
 
(343
)
 
(14
)
 
(596
)
Loss from continuing operations
(8,224
)
 
(19,111
)
 
(12,172
)
 
(38,050
)
Income (loss) from discontinued operations, net of tax
253

 
(529
)
 
(937
)
 
(1,978
)
Net loss
$
(7,971
)
 
$
(19,640
)
 
$
(13,109
)
 
$
(40,028
)
Weighted average number of shares:
 
 
 
 
 
 
 
Basic and Diluted
25,320

 
24,654

 
25,163

 
24,472

Basic and Diluted (loss) income per share:
 
 
 
 
 
 
 
Continuing Operations
$
(0.32
)
 
$
(0.78
)
 
$
(0.48
)
 
$
(1.55
)
Discontinued Operations
$
0.01

 
$
(0.02
)
 
$
(0.04
)
 
$
(0.09
)
Total
$
(0.31
)
 
$
(0.80
)
 
$
(0.52
)
 
$
(1.64
)

 
 
Three Months Ended
 
Six Months Ended
 
March 31,
 
March 31,
 
2014
 
2013
 
2014
 
2013
Capitalized interest in inventory, beginning of period
$
61,836

 
$
41,922

 
$
52,562

 
$
38,190

Interest incurred
32,458

 
29,177

 
64,899

 
57,595

Interest expense not qualified for capitalization and included as other expense
(14,659
)
 
(16,246
)
 
(30,691
)
 
(32,457
)
Capitalized interest amortized to house construction and land sales expenses
(7,379
)
 
(9,352
)
 
(14,514
)
 
(17,827
)
Capitalized interest in inventory, end of period
$
72,256

 
$
45,501

 
$
72,256

 
$
45,501






BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands, except share and per share data)
 
 
March 31, 2014
 
September 30, 2013
ASSETS
 
 
 
 
Cash and cash equivalents
 
$
299,620

 
$
504,459

Restricted cash
 
50,765

 
48,978

Accounts receivable (net of allowance of $1,278 and $1,651, respectively)
 
28,911

 
22,342

Income tax receivable
 
2,813

 
2,813

Inventory
 
 
 
 
Owned inventory
 
1,480,360

 
1,304,694

Land not owned under option agreements
 
7,751

 
9,124

Total inventory
 
1,488,111

 
1,313,818

Investments in unconsolidated entities
 
36,547

 
44,997

Deferred tax assets, net
 
5,407

 
5,253

Property, plant and equipment, net
 
18,142

 
17,000

Other assets
 
21,068

 
27,129

Total assets
 
$
1,951,384

 
$
1,986,789

 
 
 
 
 
LIABILITIES AND STOCKHOLDERS’ EQUITY
 
 
 
 
Trade accounts payable
 
$
71,891

 
$
83,800

Other liabilities
 
133,675

 
145,623

Obligations related to land not owned under option agreements
 
3,147

 
4,633

Total debt (net of discounts of $4,780 and $5,160 respectively)
 
1,511,873

 
1,512,183

Total liabilities
 
$
1,720,586

 
$
1,746,239

 
 
 
 
 
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, 63,000,000 shares authorized, 26,721,886 and 25,245,945 issued and outstanding, respectively)
 
27

 
25

Paid-in capital
 
849,520

 
846,165

Accumulated deficit
 
(618,749
)
 
(605,640
)
Total stockholders’ equity
 
230,798

 
240,550

Total liabilities and stockholders’ equity
 
$
1,951,384

 
$
1,986,789

 
 
 
 
 
Inventory Breakdown
 
 
 
 
Homes under construction
 
$
319,758

 
$
262,476

Development projects in progress
 
681,665

 
578,453

Land held for future development
 
306,119

 
341,986

Land held for sale
 
57,537

 
31,331

Capitalized interest
 
72,256

 
52,562

Model homes
 
43,025

 
37,886

Land not owned under option agreements
 
7,751

 
9,124

Total inventory
 
$
1,488,111

 
$
1,313,818




 




BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
($ in thousands, except otherwise noted)
 
 
Quarter Ended March 31,
 
Six Months Ended March 31,
SELECTED OPERATING DATA
 
2014
 
2013
 
2014
 
2013
Closings:
 
 
 
 
 
 
 
 
West region
 
453

 
504

 
888

 
1,003

East region
 
257

 
383

 
595

 
736

Southeast region
 
267

 
240

 
532

 
426

Total closings
 
977

 
1,127

 
2,015

 
2,165

 
 
 
 
 
 
 
 
 
New orders, net of cancellations:
 
 
 
 
 
 
 
 
West region
 
550

 
658

 
901

 
1,082

East region
 
424

 
442

 
732

 
751

Southeast region
 
416

 
421

 
652

 
620

Total new orders
 
1,390

 
1,521

 
2,285

 
2,453

 
 
 
 
 
 
 
 
 
Backlog units at end of period:
 
 
 
 
 
 
 
 
West region
 
751

 
918

 
751

 
918

East region
 
798

 
762

 
798

 
762

Southeast region
 
614

 
531

 
614

 
531

Total backlog units
 
2,163

 
2,211

 
2,163

 
2,211

 
 
 
 
 
 
 
 
 
Dollar value of backlog at end of period (in millions)
 
$
637.1

 
$
584.2

 
$
637.1

 
$
584.2

 
 
 
 
 
 
 
 
 
Homebuilding Revenue:
 
 
 
 
 
 
 
 
West region
 
$
119,044

 
$
117,496

 
$
239,256

 
$
227,249

East region
 
82,366

 
116,537

 
189,245

 
213,001

Southeast region
 
64,715

 
51,438

 
127,582

 
89,646

Total homebuilding revenue
 
$
266,125

 
$
285,471

 
$
556,083

 
$
529,896



 
 
Quarter Ended March 31,
 
Six Months Ended March 31,
SUPPLEMENTAL FINANCIAL DATA
 
2014
 
2013
 
2014
 
2013
Revenues:
 
 
 
 
 
 
 
 
Homebuilding
 
$
266,125

 
$
285,471

 
$
556,083

 
$
529,896

Land sales and other
 
3,896

 
2,431

 
7,108

 
4,908

Total
 
$
270,021

 
$
287,902

 
$
563,191

 
$
534,804

 
 
 
 
 
 
 
 
 
Gross profit:
 
 
 
 
 
 
 
 
Homebuilding
 
$
51,655

 
$
43,253

 
$
106,105

 
$
78,883

Land sales and other
 
517

 
632

 
737

 
1,086

Total
 
$
52,172

 
$
43,885

 
$
106,842

 
$
79,969





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. Management believes that this information assists investors in comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective level of impairments and level of debt.
 
Quarter Ended March 31,
 
Six Months Ended March 31,
 
2014
 
2013
 
2014
 
2013
Homebuilding gross profit
$
51,655

19.4
%
 
$
43,253

15.2
%
 
$
106,105

19.1
%
 
$
78,883

14.9
%
Inventory impairments and lot option abandonments (I&A)
880

 
 
2,025

 
 
911

 
 
2,229

 
Homebuilding gross profit before I&A
52,535

19.7
%
 
45,278

15.9
%
 
107,016

19.2
%
 
81,112

15.3
%
Interest amortized to cost of sales
7,379

 
 
9,352

 
 
14,514

 
 
17,827

 
Homebuilding gross profit before I&A and interest amortized to cost of sales
$
59,914

22.5
%
 
$
54,630

19.1
%
 
$
121,530

21.9
%
 
$
98,939

18.7
%
Reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, debt extinguishment, impairments and abandonments) to total company net loss (including discontinued operations), 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,
 
 
2014
 
2013
 
2014
 
2013
Net loss
 
$
(7,971
)
 
$
(19,640
)
 
$
(13,109
)
 
$
(40,028
)
Benefit from income taxes
 
(56
)
 
(352
)
 
(4
)
 
(627
)
Interest amortized to home construction and land sales expenses, capitalized interest impaired, and interest expense not qualified for capitalization
 
22,038

 
25,598

 
45,205

 
50,284

Depreciation and amortization and stock compensation amortization
 
3,488

 
3,947

 
7,004

 
7,446

Inventory impairments and option contract abandonments
 
880

 
2,025

 
911

 
2,246

Loss on debt extinguishment
 
153

 
3,638

 
153

 
3,638

Adjusted EBITDA
 
$
18,532

 
$
15,216

 
$
40,160

 
$
22,959