DELAWARE | 001-12822 | 54-2086934 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
¨ | 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 |
Item 9.01 | Financial Statements and Exhibits |
99.1 | Earnings Press Release dated May 4, 2017. |
BEAZER HOMES USA, INC. | ||||||||
Date: | May 4, 2017 | By: | /s/ Kenneth F. Khoury | |||||
Kenneth F. Khoury Executive Vice President, Chief Administrative Officer and General Counsel |
• | Adjusted EBITDA for the current quarter was $33.2 million, up $7.0 million, or nearly 27% over the prior year quarter. |
• | Revenue was higher by 11.8% due to a 7.7% increase in home closings and 3.8% increase in average selling price. |
• | Homebuilding gross margin excluding interest, impairments and abandonments was 20.7%, up 50 basis points, driven by increased home prices as well as the Company’s cost control and improved cycle time initiatives. |
• | Sales per community per month of 3.4, up 9% |
• | New home orders, net of 1,549, up 0.7% |
• | Dollar value of homes in backlog of $776.4 million, up 0.4%, driven by an increase in the average selling price of homes in backlog of $347.2 thousand, up more than $11 thousand year-over-year |
• | Selling, general and administrative expenses (SG&A) as a percentage of total revenue was 13.3%, an improvement of 60 basis points |
• | Land and land development spending of $102.9 million, up 23.1% |
• | Total available liquidity at quarter end of $279.5 million, including $138.8 million of unrestricted cash and $140.7 million available on the Company’s revolving credit facility. |
Three Months Ended March 31, | ||||||||||||
2017 | 2016 | Change* | ||||||||||
New home orders, net of cancellations | 1,549 | 1,538 | 0.7 | % | ||||||||
Orders per community per month | 3.4 | 3.1 | 9.0 | % | ||||||||
Average active community count | 154 | 166 | (7.6 | )% | ||||||||
Actual community count at quarter-end | 158 | 163 | (3.1 | )% | ||||||||
Cancellation rates | 16.6 | % | 17.6 | % | -100 bps | |||||||
Total home closings | 1,239 | 1,150 | 7.7 | % | ||||||||
Average selling price (ASP) from closings (in thousands) | $ | 340.5 | $ | 328.0 | 3.8 | % | ||||||
Homebuilding revenue (in millions) | $ | 421.9 | $ | 377.3 | 11.8 | % | ||||||
Homebuilding gross margin | 16.0 | % | 15.4 | % | 60 bps | |||||||
Homebuilding gross margin, excluding impairments and abandonments (I&A) | 16.0 | % | 15.9 | % | 10 bps | |||||||
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 20.7 | % | 20.2 | % | 50 bps | |||||||
Loss from continuing operations before income taxes (in millions) | $ | (12.0 | ) | $ | (5.2 | ) | $ | (6.7 | ) | |||
Benefit from income taxes (in millions) | $ | (4.5 | ) | $ | (3.9 | ) | $ | (0.6 | ) | |||
Loss from continuing operations (in millions)* | $ | (7.5 | ) | $ | (1.3 | ) | $ | (6.2 | ) | |||
Basic and diluted loss per share from continuing operations | $ | (0.23 | ) | $ | (0.04 | ) | $ | (0.19 | ) | |||
Loss from continuing operations before income taxes (in millions) | $ | (12.0 | ) | $ | (5.2 | ) | $ | (6.7 | ) | |||
Loss on debt extinguishment (in millions) | $ | 15.6 | $ | 1.6 | $ | 13.9 | ||||||
Inventory impairments and abandonments (in millions) | $ | 0.3 | $ | 1.8 | $ | (1.5 | ) | |||||
Income (loss) from continuing operations excluding loss on debt extinguishment and inventory impairments and abandonments before income taxes (in millions)* | $ | 3.9 | $ | (1.8 | ) | $ | 5.6 | |||||
Net loss | $ | (7.5 | ) | $ | (1.2 | ) | $ | (6.3 | ) | |||
Net income (loss) excluding loss on debt extinguishment and inventory impairments and abandonments (in millions)* + | $ | 2.5 | $ | (4.0 | ) | $ | 6.5 | |||||
Land and land development spending (in millions) | $ | 102.9 | $ | 83.6 | $ | 19.3 | ||||||
Adjusted EBITDA (in millions) | $ | 33.2 | $ | 26.2 | $ | 7.0 | ||||||
LTM Adjusted EBITDA, excluding unexpected warranty costs (net of recoveries), additional insurance recoveries and write-off of deposit (in millions) | $ | 161.8 | $ | 160.1 | $ | 1.7 |
Six Months Ended March 31, | ||||||||||||
2017 | 2016 | Change* | ||||||||||
New home orders, net of cancellations | 2,554 | 2,461 | 3.8 | % | ||||||||
LTM orders per community per month | 2.8 | 2.6 | 7.7 | % | ||||||||
Cancellation rates | 18.6 | % | 20.9 | % | -230 bps | |||||||
Total home closings | 2,234 | 2,199 | 1.6 | % | ||||||||
ASP from closings (in thousands) | $ | 339.3 | $ | 324.6 | 4.5 | % | ||||||
Homebuilding revenue (in millions) | $ | 758.0 | $ | 713.8 | 6.2 | % | ||||||
Homebuilding gross margin | 15.9 | % | 16.3 | % | -40 bps | |||||||
Homebuilding gross margin, excluding I&A | 15.9 | % | 16.7 | % | -80 bps | |||||||
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 20.6 | % | 20.8 | % | -20 bps | |||||||
Homebuilding gross margin, excluding I&A, interest amortized to cost of sales and unexpected warranty costs (net of recoveries) | 20.6 | % | 20.3 | % | 30 bps | |||||||
Loss from continuing operations before income taxes (in millions) | $ | (15.9 | ) | $ | (3.4 | ) | $ | (12.5 | ) | |||
Benefit from income taxes (in millions) | $ | (7.0 | ) | $ | (3.3 | ) | $ | (3.7 | ) | |||
Loss from continuing operations (in millions)* | $ | (8.9 | ) | $ | (0.1 | ) | $ | (8.7 | ) | |||
Basic and diluted loss per share from continuing operations | $ | (0.27 | ) | $ | (0.01 | ) | $ | (0.26 | ) | |||
Loss from continuing operations before income taxes (in millions) | $ | (15.9 | ) | $ | (3.4 | ) | $ | (12.5 | ) | |||
Loss on debt extinguishment (in millions) | $ | 15.6 | $ | 2.5 | $ | 13.1 | ||||||
Inventory impairments and abandonments (in millions) | $ | 0.3 | $ | 3.2 | $ | (2.9 | ) | |||||
Income from continuing operations excluding loss on debt extinguishment and inventory impairments and abandonments before income taxes (in millions)* | $ | — | $ | 2.2 | $ | (2.3 | ) | |||||
Net loss | $ | (9.0 | ) | $ | (0.2 | ) | $ | (8.7 | ) | |||
Net income (loss) excluding loss on debt extinguishment and inventory impairments and abandonments (in millions)* | $ | (1.2 | ) | $ | 1.7 | $ | (2.9 | ) | ||||
Land and land development spending (in millions) | $ | 206.1 | $ | 195.3 | $ | 10.8 | ||||||
Adjusted EBITDA (in millions) | $ | 54.9 | $ | 55.7 | $ | (0.7 | ) | |||||
Adjusted EBITDA, excluding unexpected warranty costs (net of recoveries) and write-off of a deposit (in millions) | $ | 57.6 | $ | 52.1 | $ | 5.6 |
As of March 31, | |||||||||||
2017 | 2016 | Change | |||||||||
Backlog units | 2,236 | 2,300 | (2.8 | )% | |||||||
Dollar value of backlog (in millions) | $ | 776.4 | $ | 773.0 | 0.4 | % | |||||
ASP in backlog (in thousands) | $ | 347.2 | $ | 336.1 | 3.3 | % | |||||
Land and lots controlled | 23,181 | 25,132 | (7.8 | )% |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total revenue | $ | 425,468 | $ | 385,607 | $ | 764,709 | $ | 730,056 | |||||||
Home construction and land sales expenses | 357,788 | 324,216 | 643,366 | 609,727 | |||||||||||
Inventory impairments and abandonments | 282 | 1,825 | 282 | 3,181 | |||||||||||
Gross profit | 67,398 | 59,566 | 121,061 | 117,148 | |||||||||||
Commissions | 16,632 | 14,582 | 29,955 | 28,356 | |||||||||||
General and administrative expenses | 40,100 | 38,898 | 76,488 | 70,567 | |||||||||||
Depreciation and amortization | 3,155 | 3,056 | 5,832 | 6,047 | |||||||||||
Operating income | 7,511 | 3,030 | 8,786 | 12,178 | |||||||||||
Equity in income (loss) of unconsolidated entities | 33 | (51 | ) | 55 | 9 | ||||||||||
Loss on extinguishment of debt | (15,563 | ) | (1,631 | ) | (15,563 | ) | (2,459 | ) | |||||||
Other expense, net | (3,940 | ) | (6,558 | ) | (9,136 | ) | (13,123 | ) | |||||||
Loss from continuing operations before income taxes | (11,959 | ) | (5,210 | ) | (15,858 | ) | (3,395 | ) | |||||||
Benefit from income taxes | (4,464 | ) | (3,898 | ) | (7,004 | ) | (3,282 | ) | |||||||
Loss from continuing operations | (7,495 | ) | (1,312 | ) | (8,854 | ) | (113 | ) | |||||||
Income (loss) from discontinued operations, net of tax | (40 | ) | 78 | (110 | ) | (122 | ) | ||||||||
Net loss and comprehensive loss | $ | (7,535 | ) | $ | (1,234 | ) | $ | (8,964 | ) | $ | (235 | ) | |||
Weighted average number of shares: | |||||||||||||||
Basic and diluted | 31,969 | 31,808 | 31,931 | 31,783 | |||||||||||
Basic and diluted loss per share: | |||||||||||||||
Continuing operations | $ | (0.23 | ) | $ | (0.04 | ) | $ | (0.27 | ) | $ | (0.01 | ) | |||
Discontinued operations | — | — | — | — | |||||||||||
Total | $ | (0.23 | ) | $ | (0.04 | ) | $ | (0.27 | ) | $ | (0.01 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Capitalized interest in inventory, beginning of period | $ | 144,299 | $ | 132,462 | $ | 138,108 | $ | 123,457 | |||||||
Interest incurred | 26,482 | 30,467 | 53,569 | 60,555 | |||||||||||
Capitalized interest impaired | — | (84 | ) | — | (84 | ) | |||||||||
Interest expense not qualified for capitalization and included as other expense | (4,046 | ) | (6,633 | ) | (9,298 | ) | (14,065 | ) | |||||||
Capitalized interest amortized to home construction and land sales expenses | (19,819 | ) | (16,073 | ) | (35,463 | ) | (29,724 | ) | |||||||
Capitalized interest in inventory, end of period | $ | 146,916 | $ | 140,139 | $ | 146,916 | $ | 140,139 |
March 31, 2017 | September 30, 2016 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 138,809 | $ | 228,871 | |||
Restricted cash | 14,696 | 14,405 | |||||
Accounts receivable (net of allowance of $193 and $354, respectively) | 43,781 | 53,226 | |||||
Income tax receivable | 288 | 292 | |||||
Owned Inventory | 1,631,072 | 1,569,279 | |||||
Investments in unconsolidated entities | 6,112 | 10,470 | |||||
Deferred tax assets, net | 317,296 | 309,955 | |||||
Property and equipment, net | 18,981 | 19,138 | |||||
Other assets | 4,166 | 7,522 | |||||
Total assets | $ | 2,175,201 | $ | 2,213,158 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Trade accounts payable | $ | 100,290 | $ | 104,174 | |||
Other liabilities | 102,527 | 134,253 | |||||
Total debt (net of premium of $3,799 and $1,482, respectively, and debt issuance costs of $15,709 and $15,514, respectively) | 1,334,362 | 1,331,878 | |||||
Total liabilities | $ | 1,537,179 | $ | 1,570,305 | |||
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, 33,544,628 issued and outstanding and 33,071,331 issued and outstanding, respectively) | 34 | 33 | |||||
Paid-in capital | 869,423 | 865,290 | |||||
Accumulated deficit | (231,435 | ) | (222,470 | ) | |||
Total stockholders’ equity | 638,022 | 642,853 | |||||
Total liabilities and stockholders’ equity | $ | 2,175,201 | $ | 2,213,158 | |||
Inventory Breakdown | |||||||
Homes under construction | $ | 462,017 | $ | 377,191 | |||
Development projects in progress | 772,664 | 742,417 | |||||
Land held for future development | 152,724 | 213,006 | |||||
Land held for sale | 25,585 | 29,696 | |||||
Capitalized interest | 146,916 | 138,108 | |||||
Model homes | 71,166 | 68,861 | |||||
Total owned inventory | $ | 1,631,072 | $ | 1,569,279 |
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||
SELECTED OPERATING DATA | 2017 | 2016 | 2017 | 2016 | ||||||||||
Closings: | ||||||||||||||
West region | 561 | 554 | 1,071 | 1,046 | ||||||||||
East region | 286 | 277 | 503 | 534 | ||||||||||
Southeast region | 392 | 319 | 660 | 619 | ||||||||||
Total closings | 1,239 | 1,150 | 2,234 | 2,199 | ||||||||||
New orders, net of cancellations: | ||||||||||||||
West region | 683 | 737 | 1,150 | 1,159 | ||||||||||
East region | 414 | 391 | 642 | 639 | ||||||||||
Southeast region | 452 | 410 | 762 | 663 | ||||||||||
Total new orders, net | 1,549 | 1,538 | 2,554 | 2,461 | ||||||||||
As of March 31, | ||||||||||||||
Backlog units at end of period: | 2017 | 2016 | ||||||||||||
West region | 907 | 1,068 | ||||||||||||
East region | 583 | 592 | ||||||||||||
Southeast region | 746 | 640 | ||||||||||||
Total backlog units | 2,236 | 2,300 | ||||||||||||
Dollar value of backlog at end of period (in millions) | $ | 776.4 | $ | 773.0 | ||||||||||
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
SUPPLEMENTAL FINANCIAL DATA | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Homebuilding revenue: | ||||||||||||||||
West region | $ | 185,155 | $ | 176,940 | $ | 356,904 | $ | 334,136 | ||||||||
East region | 113,279 | 101,862 | 194,529 | 196,207 | ||||||||||||
Southeast region | 123,440 | 98,453 | 206,567 | 183,505 | ||||||||||||
Total homebuilding revenue | $ | 421,874 | $ | 377,255 | $ | 758,000 | $ | 713,848 | ||||||||
Revenues: | ||||||||||||||||
Homebuilding | $ | 421,874 | $ | 377,255 | $ | 758,000 | $ | 713,848 | ||||||||
Land sales and other | 3,594 | 8,352 | 6,709 | 16,208 | ||||||||||||
Total revenues | $ | 425,468 | $ | 385,607 | $ | 764,709 | $ | 730,056 | ||||||||
Gross profit: | ||||||||||||||||
Homebuilding | $ | 67,324 | $ | 58,275 | $ | 120,528 | $ | 116,338 | ||||||||
Land sales and other | 74 | 1,291 | 533 | 810 | ||||||||||||
Total gross profit | $ | 67,398 | $ | 59,566 | $ | 121,061 | $ | 117,148 |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
Homebuilding gross profit/margin | $ | 67,324 | 16.0 | % | $ | 58,275 | 15.4 | % | $ | 120,528 | 15.9 | % | $ | 116,338 | 16.3 | % | |||||||
Inventory impairments and abandonments (I&A) | 188 | 1,825 | 188 | 2,613 | |||||||||||||||||||
Homebuilding gross profit/margin before I&A | 67,512 | 16.0 | % | 60,100 | 15.9 | % | 120,716 | 15.9 | % | 118,951 | 16.7 | % | |||||||||||
Interest amortized to cost of sales | 19,819 | 16,073 | 35,463 | 29,440 | |||||||||||||||||||
Homebuilding gross profit/margin before I&A and interest amortized to cost of sales | 87,331 | 20.7 | % | 76,173 | 20.2 | % | 156,179 | 20.6 | % | 148,391 | 20.8 | % | |||||||||||
Unexpected warranty costs related to Florida stucco issues (net of expected insurance recoveries) | — | — | — | (3,612 | ) | ||||||||||||||||||
Homebuilding gross profit/margin before I&A, interest amortized to cost of sales and unexpected warranty costs (net of recoveries) | $ | 87,331 | 20.7 | % | $ | 76,173 | 20.2 | % | $ | 156,179 | 20.6 | % | $ | 144,779 | 20.3 | % |
Three Months Ended March 31, | Six Months Ended March 31, | LTM Ended March 31,(a) | ||||||||||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Net income (loss) | $ | (7,535 | ) | $ | (1,234 | ) | $ | (8,964 | ) | $ | (235 | ) | $ | (4,036 | ) | $ | 368,195 | |||||||
Expense (benefit) from income taxes | (4,493 | ) | (3,865 | ) | (7,072 | ) | (3,359 | ) | 12,511 | (328,692 | ) | |||||||||||||
Interest amortized to home construction and land sales expenses, capitalized interest impaired and interest expense not qualified for capitalization | 23,865 | 22,790 | 44,761 | 43,873 | 105,598 | 94,174 | ||||||||||||||||||
Depreciation and amortization and stock-based compensation amortization | 5,495 | 5,087 | 10,354 | 9,834 | 22,272 | 21,270 | ||||||||||||||||||
Inventory impairments and abandonments (b) | 282 | 1,741 | 282 | 3,097 | 11,757 | 6,206 | ||||||||||||||||||
Loss on extinguishment of debt | 15,563 | 1,631 | 15,563 | 2,459 | 26,527 | 2,539 | ||||||||||||||||||
Adjusted EBITDA | $ | 33,177 | $ | 26,150 | $ | 54,924 | $ | 55,669 | $ | 174,629 | $ | 163,692 | ||||||||||||
Unexpected warranty costs related to Florida stucco issues (net of expected insurance recoveries) | — | — | — | (3,612 | ) | — | (3,612 | ) | ||||||||||||||||
Additional insurance recoveries from third-party insurer | — | — | — | — | (15,500 | ) | — | |||||||||||||||||
Write-off of deposit on legacy land investment | — | — | 2,700 | — | 2,700 | — | ||||||||||||||||||
Adjusted EBITDA excluding unexpected warranty costs (net of recoveries), additional insurance recoveries and write-off of deposit | $ | 33,177 | $ | 26,150 | $ | 57,624 | $ | 52,057 | $ | 161,829 | $ | 160,080 |