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): April 28, 2022
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) | ||||||||||||
(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)) | |||||
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
| Item 2.02 | Results of Operations and Financial Condition | ||||
On April 28, 2022 , Beazer Homes USA, Inc. issued a press release announcing results of operations for the three and six months ended March 31, 2022. A copy of the press release is attached hereto as Exhibit 99.1.
The information provided pursuant to this Item 2.02, including Exhibit 99.1 in Item 9.01, is "furnished" and shall not be deemed to be "filed" with the Securities and Exchange Commission or incorporated by reference in any filing under the Securities and Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filings.
| Item 8.01 | Other Events | ||||
On April 27, 2022, the Company entered into an agreement to acquire substantially all of the assets of Imagine Homes, a private homebuilder in San Antonio, Texas. A copy of the press release announcing the transaction is attached hereto as Exhibit 99.1.
The information provided pursuant to this Current Report on Form 8-K, including Exhibit 99.1 in Item 9.01, is “furnished” and shall not be deemed to be “filed” with the Securities and Exchange Commission or incorporated by reference in any filing under the Securities and Exchange Act of 1934, as amended, or the Securities Act of 1933, as amended, except as shall be expressly set forth by specific reference in any such filings.
| Item 9.01 | Financial Statements and Exhibits | ||||
(d) Exhibits
| 99.1 | |||||
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) | ||||
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: | By: | /s/ David I. Goldberg | ||||||||||||||||||||||||
| David I. Goldberg Senior Vice President and Chief Financial Officer | ||||||||||||||||||||||||||
Exhibit 99.1
PRESS RELEASE
Beazer Homes Reports Strong Second Quarter Fiscal 2022 Results
ATLANTA, April 28, 2022 - Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three and six months ended March 31, 2022.
“We generated very strong second quarter financial results,” said Allan P. Merrill, the Company’s Chairman and Chief Executive Officer. “Increases in both home prices and margins allowed us to significantly improve profitability despite continuing supply chain challenges. We also increased our lot position and reduced leverage as we continued to demonstrate positive results from our Balanced Growth strategy.”
Commenting on market conditions and updated fiscal 2022 full-year expectations, Mr. Merrill said, “While supply chain challenges are expected to continue to impact the level of housing starts and construction cycle times, the larger issue is worsening home affordability as both home prices and mortgage rates have moved higher this year. Although new home orders have not been significantly impacted to date, we expect future periods to present a more challenging sales environment.
However, with the size of our backlog, we have excellent visibility into full year financial results. We now expect to generate fiscal year 2022 earnings per share of at least $6.00, inclusive of previously disclosed tax benefits of approximately $0.40 per share. We also expect to reduce debt below $1 billion by year end, even as we further expand our active lot position.”
Looking further out, Mr. Merrill concluded, “We remain confident in the multi-year growth of our business and the new home industry. The fundamental disconnect between the demand for homes and the likely supply of homes – which has given rise to a multimillion home deficit over the past decade – remains in place. As such, we expect to be able to work through affordability challenges to deliver improving profitability and returns from our less leveraged and more efficient balance sheet, while expanding our ESG activities to create durable value for all of our stakeholders.”
Beazer Homes Fiscal Second Quarter 2022 Highlights and Comparison to Fiscal Second Quarter 2021
•Net income from continuing operations of $44.7 million, or $1.45 per diluted share, compared to net income from continuing operations of $24.6 million, or $0.81 per diluted share, in fiscal second quarter 2021
•Adjusted EBITDA of $77.4 million, up 20.5%
•Homebuilding revenue of $507.2 million, down 7.3% on a 22.3% decrease in home closings to 1,078, partially offset by a 19.3% increase in average selling price to $470.5 thousand
•Homebuilding gross margin was 23.5%, up 570 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 26.8%, up 460 basis points
•SG&A as a percentage of total revenue was 12.2%, up 120 basis points year-over-year
•Net new orders of 1,291, down 30.4% on a 9.2% decrease in average community count to 119 and a 23.4% decrease in orders/community/month to 3.6
•Backlog dollar value of $1,583.5 million, up 14.2% on a 20.9% increase in average selling price of homes in backlog to $507.4 thousand, partially offset by a 5.5% decrease in backlog units to 3,121
•Controlled lots of 23,516, up 24.7% from 18,851
•Land acquisition and land development spending was $132.6 million, up 36.3% from $97.3 million
•Repurchased a total of $6.0 million of debt
•Unrestricted cash at quarter end was $163.9 million; total liquidity was $413.9 million
The following provides additional details on the Company's performance during the fiscal second quarter 2022:
Profitability. Net income from continuing operations was $44.7 million, generating diluted earnings per share of $1.45. This included the impact of energy efficiency tax credits of $3.0 million, or $0.10 per share. Second quarter adjusted EBITDA of $77.4 million was up $13.2 million, or 20.5%, year-over-year. The increase in profitability was primarily driven by higher homebuilding gross margin.
Orders. Net new orders for the second quarter decreased to 1,291, down 30.4% from 1,854 in the prior year period. The decrease in net new orders was driven by a 9.2% decrease in average community count to 119 and a 23.4% decrease in sales pace to 3.6 orders per community per month, down from 4.7 in the prior year period, as the Company proactively limited sales pace to align with the pace of production, manage lot supply, optimize margins and ensure a positive customer experience. Sales pace remained strong compared to the historical average of 3.4 over the last 10 years for the second quarter. The cancellation rate for the quarter was 12.2%, up from 10.0% in the prior year period.
Backlog. The dollar value of homes in backlog as of March 31, 2022 increased 14.2% to $1,583.5 million, representing 3,121 homes, compared to $1,386.4 million, representing 3,303 homes, at the same time last year. The average selling price of homes in backlog was $507.4 thousand, up 20.9% versus the previous year.
Homebuilding Revenue. Second quarter homebuilding revenue was $507.2 million, down 7.3% year-over-year. The decrease in homebuilding revenue was driven by a 22.3% decrease in home closings to 1,078 homes, partially offset by a 19.3% increase in the average selling price to $470.5 thousand.
Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 26.8% for the second quarter, up 460 basis points year-over-year, driven primarily by pricing increases and lower sales incentives.
SG&A Expenses. Selling, general and administrative expenses as a percentage of total revenue was 12.2% for the quarter, up 120 basis points year-over-year primarily due to decreases in closings and revenue. SG&A on an absolute dollar basis increased by $1.5 million, or 2.4%, year-over-year primarily due to increased personnel expense.
Land Position. Controlled lots increased 24.7% to 23,516, compared to 18,851 in the prior year. Excluding land held for future development and land held for sale lots, active controlled lots were 22,728, up 24.7% year-over-year. The Company had 11,551 lots, or 50.8% of its total active lots, under option contracts compared to 8,381 lots, or 46.0% of its total active lots, under option contracts a year ago.
Debt Repurchases. The Company repurchased $6.0 million of its outstanding 5.875% unsecured Senior Notes due October 2027 at an average price of $101.888 per $100 principal amount.
Liquidity. At the close of the second quarter, the Company had approximately $413.9 million of available liquidity, including $163.9 million of unrestricted cash and a fully undrawn revolving credit facility capacity of $250.0 million.
Imagine Homes Acquisition
The Company also announced today that it had entered into an agreement to acquire substantially all of the assets of Imagine Homes, a private San Antonio-based homebuilder. Imagine Homes, a champion of green building practices since its inception in 2006, has been recognized as a leader in energy efficient new construction, earning local and national accolades including the EPA’s Energy Star Certified Homes Market Leader Award and six NAHB Green Building AwardsTM. Terms of the transaction were not disclosed.
For the past 16 years, Beazer has held a one-third ownership stake in Imagine Homes. The transaction reiterates Beazer’s commitment to leading the industry in energy efficiency initiatives and expands the Company’s footprint in Texas, which already includes the Dallas and Houston markets.
Commitment to ESG
In December 2021, the Company published its inaugural ESG Summary, which contains detailed disclosures of environmental, social and governance (ESG) initiatives, as well as metrics that are responsive to sustainability accounting standards promulgated by the Sustainability Accounting Standards Board (SASB) for companies within the homebuilding industry. The ESG Summary represents another step forward in the Company's commitment to increased ESG accountability and provides a foundation to build increased transparency by directly reporting on relevant sustainability issues, risks and opportunities that impact the business.
Demonstrating recognition for the Company's efforts to create and sustain a strong reputation among employees, shareholders, customers and other partners, Beazer Homes was ranked first among construction companies in Newsweek's inaugural list of America's Most Trusted Companies 2022. This award was presented to the Company in April 2022 by Newsweek and Statista Inc. America's Most Trusted Companies 2022 were identified based on an independent survey of approximately 50,000 U.S. residents who rated companies they knew from the perspective of customers, investors and employees.
Summary results for the three and six months ended March 31, 2022 are as follows:
| Three Months Ended March 31, | |||||||||||||||||
| 2022 | 2021 | Change* | |||||||||||||||
| New home orders, net of cancellations | 1,291 | 1,854 | (30.4) | % | |||||||||||||
| Orders per community per month | 3.6 | 4.7 | (23.4) | % | |||||||||||||
| Average active community count | 119 | 131 | (9.2) | % | |||||||||||||
| Actual community count at quarter-end | 119 | 132 | (9.8) | % | |||||||||||||
| Cancellation rates | 12.2 | % | 10.0 | % | 220 | bps | |||||||||||
| Total home closings | 1,078 | 1,388 | (22.3) | % | |||||||||||||
| Average selling price (ASP) from closings (in thousands) | $ | 470.5 | $ | 394.4 | 19.3 | % | |||||||||||
| Homebuilding revenue (in millions) | $ | 507.2 | $ | 547.4 | (7.3) | % | |||||||||||
| Homebuilding gross margin | 23.5 | % | 17.8 | % | 570 bps | ||||||||||||
| Homebuilding gross margin, excluding impairments and abandonments (I&A) | 23.6 | % | 17.8 | % | 580 bps | ||||||||||||
| Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 26.8 | % | 22.2 | % | 460 bps | ||||||||||||
| Income from continuing operations before income taxes (in millions) | $ | 54.8 | $ | 32.3 | 69.3 | % | |||||||||||
| Expense from income taxes (in millions) | $ | 10.1 | $ | 7.7 | 30.7 | % | |||||||||||
| Income from continuing operations, net of tax (in millions) | $ | 44.7 | $ | 24.6 | 81.3 | % | |||||||||||
| Basic income per share from continuing operations | $ | 1.46 | $ | 0.82 | 78.0 | % | |||||||||||
| Diluted income per share from continuing operations | $ | 1.45 | $ | 0.81 | 79.0 | % | |||||||||||
| Net income | $ | 44.7 | $ | 24.5 | 82.1 | % | |||||||||||
| Land and land development spending (in millions) | $ | 132.6 | $ | 97.3 | 36.3 | % | |||||||||||
| Adjusted EBITDA (in millions) | $ | 77.4 | $ | 64.2 | 20.5 | % | |||||||||||
| LTM Adjusted EBITDA (in millions) | $ | 293.4 | $ | 238.9 | 22.8 | % | |||||||||||
* Change and totals are calculated using unrounded numbers.
"LTM" indicates amounts for the trailing 12 months.
| Six Months Ended March 31, | |||||||||||||||||
| 2022 | 2021 | Change* | |||||||||||||||
| New home orders, net of cancellations | 2,432 | 3,296 | (26.2) | % | |||||||||||||
| LTM orders per community per month | 3.3 | 3.8 | (13.2) | % | |||||||||||||
| Cancellation rates | 12.0 | % | 11.0 | % | 100 | bps | |||||||||||
| Total home closings | 2,097 | 2,502 | (16.2) | % | |||||||||||||
| ASP from closings (in thousands) | $ | 454.9 | $ | 388.3 | 17.2 | % | |||||||||||
| Homebuilding revenue (in millions) | $ | 953.9 | $ | 971.6 | (1.8) | % | |||||||||||
| Homebuilding gross margin | 22.3 | % | 17.7 | % | 460 bps | ||||||||||||
| Homebuilding gross margin, excluding I&A | 22.3 | % | 17.8 | % | 450 bps | ||||||||||||
| Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 25.6 | % | 22.2 | % | 340 bps | ||||||||||||
| Income from continuing operations before income taxes (in millions) | $ | 96.1 | $ | 48.5 | 98.1 | % | |||||||||||
| Expense from income taxes (in millions) | $ | 16.5 | $ | 11.8 | 39.8 | % | |||||||||||
| Income from continuing operations, net of tax (in millions) | $ | 79.6 | $ | 36.7 | 116.9 | % | |||||||||||
| Basic income per share from continuing operations | $ | 2.61 | $ | 1.23 | 112.2 | % | |||||||||||
| Diluted income per share from continuing operations | $ | 2.59 | $ | 1.22 | 112.3 | % | |||||||||||
| Net income | $ | 79.6 | $ | 36.5 | 117.8 | % | |||||||||||
| Land and land development spending (in millions) | $ | 263.3 | $ | 206.9 | 27.2 | % | |||||||||||
| Adjusted EBITDA (in millions) | $ | 138.5 | $ | 107.8 | 28.5 | % | |||||||||||
* Change and totals are calculated using unrounded numbers.
"LTM" indicates amounts for the trailing 12 months.
| As of March 31, | |||||||||||||||||
| 2022 | 2021 | Change | |||||||||||||||
| Backlog units | 3,121 | 3,303 | (5.5) | % | |||||||||||||
| Dollar value of backlog (in millions) | $ | 1,583.5 | $ | 1,386.4 | 14.2 | % | |||||||||||
| ASP in backlog (in thousands) | $ | 507.4 | $ | 419.7 | 20.9 | % | |||||||||||
| Land and lots controlled | 23,516 | 18,851 | 24.7 | % | |||||||||||||
Conference Call
The Company will hold a conference call on April 28, 2022 at 5:00 p.m. ET to discuss these results. Interested parties may listen to the conference call and view the Company's slide presentation on the "Investor Relations" page of the Company's website, www.beazer.com. In addition, the conference call will be available by telephone at 800-475-0542 (for international callers, dial 517-308-9429). To be admitted to the call, enter the pass code “8571348". A replay of the conference call will be available, until 10:00 PM ET on May 5, 2022 at 866-511-1891 (for international callers, dial 203-369-1946) with pass code “3740.”
About Beazer Homes
Headquartered in Atlanta, Beazer Homes (NYSE: BZH) is one of the country’s largest homebuilders. Every Beazer home is designed and built to provide Surprising Performance, giving you more quality and more comfort from the moment you move in – saving you money every month. With Beazer's Choice Plans™, you can personalize your primary living areas – giving you a choice of how you want to live in the home, at no additional cost. And unlike most national homebuilders, we empower our customers to shop and compare loan options. Our Mortgage Choice program gives you the resources to easily compare multiple loan offers and choose the best lender and loan offer for you, saving you thousands over the life of your loan.
We build our homes in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia. For more information, visit beazer.com, or check out Beazer on Facebook, Instagram 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 cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; (ii) increases in mortgage interest rates and reduced availability of mortgage financing due to, among other factors, recent and likely continued actions by the Federal Reserve to address sharp increases in inflation; (iii) other economic changes nationally and in local markets, including changes in consumer confidence, wage levels, declines in employment levels, and an increase in the number of foreclosures, each of which is outside our control and affects the affordability of, and demand for, the homes we sell; (iv) potential negative impacts of the COVID-19 pandemic, which, in addition to exacerbating each of the risks listed above and below, may include a significant decrease in demand for our homes or consumer confidence generally with respect to purchasing a home, an inability to sell and build homes in a typical manner or at all, increased costs or decreased supply of building materials, including lumber, or the availability of subcontractors, housing inspectors, and other third-parties we rely on to support our operations, and recognizing charges in future periods, which may be material, for goodwill impairments, inventory impairments and/or land option contract abandonments; (v) supply chain challenges negatively impacting our homebuilding production, including shortages of raw materials and other critical components such as windows, doors, and appliances; (vi) shortages of or increased costs for labor used in housing production, and the level of quality and craftsmanship provided by such labor; (vii) the availability and cost of land and the risks associated with the future value of our inventory, such as asset impairment charges we took on select California assets during the second quarter of fiscal 2019; (viii) factors affecting margins, such as decreased land values underlying land option agreements, increased land development costs in communities under development or delays or difficulties in implementing initiatives to reduce our production and overhead cost structure; (ix) our ability to raise debt and/or equity capital, due to factors such as limitations in the capital markets (including market volatility) or adverse credit market conditions, and our ability to otherwise meet our ongoing liquidity needs (which could cause us to fail to meet the terms of our
covenants and other requirements under our various debt instruments and therefore trigger an acceleration of a significant portion or all of our outstanding debt obligations), including the impact of any downgrades of our credit ratings or reduction in our liquidity levels; (x) market perceptions regarding any capital raising initiatives we may undertake (including future issuances of equity or debt capital); (xi) terrorist acts, protests and civil unrest, political uncertainty, natural disasters, acts of war or other factors over which the Company has no control; (xii) inaccurate estimates related to homes to be delivered in the future (backlog), as they are subject to various cancellation risks that cannot be fully controlled; (xiii) changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes; (xiv) increased competition or delays in reacting to changing consumer preferences in home design; (xv) natural disasters or other related events that could result in delays in land development or home construction, increase our costs or decrease demand in the impacted areas; (xvi) the potential recoverability of our deferred tax assets; (xvii) increases in corporate tax rates; (xviii) 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 or governmental policies, including those related to the environment; (xix) the results of litigation or government proceedings and fulfillment of any related obligations; (xx) the impact of construction defect and home warranty claims; (xxi) the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred; (xxii) the impact of information technology failures, cybersecurity issues or data security breaches; (xxiii) the impact of governmental regulations on homebuilding in key markets, such as regulations limiting the availability of water; and (xxiv) the success of our ESG initiatives, including our ability to meet our goal that every home we build will be Net Zero Energy Ready by 2025 as well as the success of any other related partnerships or pilot programs we may enter into in order to increase the energy efficiency of our homes and prepare for a Net Zero future.
Any forward-looking statement, including any statement expressing confidence regarding future outcomes, speaks only as of the date on which such statement is made and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible to predict all such factors.
CONTACT: Beazer Homes USA, Inc.
David I. Goldberg
Sr. Vice President & Chief Financial Officer
770-829-3700
investor.relations@beazer.com
-Tables Follow-
BEAZER HOMES USA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| March 31, | March 31, | ||||||||||||||||||||||
| in thousands (except per share data) | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Total revenue | $ | 508,506 | $ | 549,889 | $ | 962,655 | $ | 978,428 | |||||||||||||||
| Home construction and land sales expenses | 387,821 | 451,963 | 744,570 | 804,744 | |||||||||||||||||||
| Inventory impairments and abandonments | 935 | — | 935 | 465 | |||||||||||||||||||
| Gross profit | 119,750 | 97,926 | 217,150 | 173,219 | |||||||||||||||||||
| Commissions | 16,578 | 20,884 | 32,391 | 37,391 | |||||||||||||||||||
| General and administrative expenses | 45,530 | 39,741 | 83,297 | 77,717 | |||||||||||||||||||
| Depreciation and amortization | 3,031 | 3,683 | 5,912 | 6,805 | |||||||||||||||||||
| Operating income | 54,611 | 33,618 | 95,550 | 51,306 | |||||||||||||||||||
| Equity in income of unconsolidated entities | 163 | 186 | 451 | 111 | |||||||||||||||||||
| Loss on extinguishment of debt, net | (164) | (563) | (164) | (563) | |||||||||||||||||||
| Other income (expense), net | 140 | (894) | 271 | (2,346) | |||||||||||||||||||
| Income from continuing operations before income taxes | 54,750 | 32,347 | 96,108 | 48,508 | |||||||||||||||||||
| Expense from income taxes | 10,072 | 7,704 | 16,535 | 11,829 | |||||||||||||||||||
| Income from continuing operations | 44,678 | 24,643 | 79,573 | 36,679 | |||||||||||||||||||
| Loss from discontinued operations, net of tax | (6) | (115) | (16) | (154) | |||||||||||||||||||
| Net income | $ | 44,672 | $ | 24,528 | $ | 79,557 | $ | 36,525 | |||||||||||||||
| Weighted-average number of shares: | |||||||||||||||||||||||
| Basic | 30,594 | 29,953 | 30,464 | 29,862 | |||||||||||||||||||
| Diluted | 30,823 | 30,215 | 30,772 | 30,150 | |||||||||||||||||||
| Basic income (loss) per share: | |||||||||||||||||||||||
| Continuing operations | $ | 1.46 | $ | 0.82 | $ | 2.61 | $ | 1.23 | |||||||||||||||
| Discontinued operations | — | — | — | (0.01) | |||||||||||||||||||
| Total | $ | 1.46 | $ | 0.82 | $ | 2.61 | $ | 1.22 | |||||||||||||||
| Diluted income (loss) per share: | |||||||||||||||||||||||
| Continuing operations | $ | 1.45 | $ | 0.81 | $ | 2.59 | $ | 1.22 | |||||||||||||||
| Discontinued operations | — | — | — | (0.01) | |||||||||||||||||||
| Total | $ | 1.45 | $ | 0.81 | $ | 2.59 | $ | 1.21 | |||||||||||||||
| Three Months Ended | Six Months Ended | ||||||||||||||||||||||
| March 31, | March 31, | ||||||||||||||||||||||
| Capitalized Interest in Inventory | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Capitalized interest in inventory, beginning of period | $ | 110,516 | $ | 119,148 | $ | 106,985 | $ | 119,659 | |||||||||||||||
| Interest incurred | 18,253 | 19,345 | 36,564 | 39,247 | |||||||||||||||||||
| Interest expense not qualified for capitalization and included as other expense | — | (969) | — | (2,569) | |||||||||||||||||||
| Capitalized interest amortized to home construction and land sales expenses | (16,083) | (24,110) | (30,863) | (42,923) | |||||||||||||||||||
| Capitalized interest in inventory, end of period | $ | 112,686 | $ | 113,414 | $ | 112,686 | $ | 113,414 | |||||||||||||||
BEAZER HOMES USA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| in thousands (except share and per share data) | March 31, 2022 | September 30, 2021 | |||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 163,905 | $ | 246,715 | |||||||
| Restricted cash | 33,343 | 27,428 | |||||||||
| Accounts receivable (net of allowance of $290 and $290, respectively) | 24,289 | 25,685 | |||||||||
| Income tax receivable | 9,866 | 9,929 | |||||||||
| Owned inventory | 1,676,972 | 1,501,602 | |||||||||
| Investments in unconsolidated entities | 4,667 | 4,464 | |||||||||
| Deferred tax assets, net | 190,876 | 204,766 | |||||||||
| Property and equipment, net | 23,168 | 22,885 | |||||||||
| Operating lease right-of-use assets | 11,301 | 12,344 | |||||||||
| Goodwill | 11,376 | 11,376 | |||||||||
| Other assets | 10,241 | 11,616 | |||||||||
| Total assets | $ | 2,160,004 | $ | 2,078,810 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Trade accounts payable | $ | 147,257 | $ | 133,391 | |||||||
| Operating lease liabilities | 12,912 | 14,154 | |||||||||
| Other liabilities | 147,583 | 152,351 | |||||||||
| Total debt (net of debt issuance costs of $8,151 and $8,983, respectively) | 1,049,895 | 1,054,030 | |||||||||
| Total liabilities | 1,357,647 | 1,353,926 | |||||||||
| Stockholders’ equity: | |||||||||||
| Preferred stock (par value $0.01 per share, 5,000,000 shares authorized, no shares issued) | — | — | |||||||||
| Common stock (par value $0.001 per share, 63,000,000 shares authorized, 31,457,627 issued and outstanding and 31,294,198 issued and outstanding, respectively) | 31 | 31 | |||||||||
| Paid-in capital | 864,074 | 866,158 | |||||||||
| Accumulated deficit | (61,748) | (141,305) | |||||||||
| Total stockholders’ equity | 802,357 | 724,884 | |||||||||
| Total liabilities and stockholders’ equity | $ | 2,160,004 | $ | 2,078,810 | |||||||
| Inventory Breakdown | |||||||||||
| Homes under construction | $ | 838,139 | $ | 648,283 | |||||||
| Land under development | 619,385 | 648,404 | |||||||||
| Land held for future development | 19,879 | 19,879 | |||||||||
| Land held for sale | 14,167 | 9,179 | |||||||||
| Capitalized interest | 112,686 | 106,985 | |||||||||
| Model homes | 72,716 | 68,872 | |||||||||
| Total owned inventory | $ | 1,676,972 | $ | 1,501,602 | |||||||
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
| SELECTED OPERATING DATA | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Closings: | |||||||||||||||||||||||
| West region | 665 | 757 | 1,268 | 1,399 | |||||||||||||||||||
| East region | 252 | 321 | 497 | 544 | |||||||||||||||||||
| Southeast region | 161 | 310 | 332 | 559 | |||||||||||||||||||
| Total closings | 1,078 | 1,388 | 2,097 | 2,502 | |||||||||||||||||||
| New orders, net of cancellations: | |||||||||||||||||||||||
| West region | 832 | 1,116 | 1,487 | 1,898 | |||||||||||||||||||
| East region | 284 | 357 | 520 | 677 | |||||||||||||||||||
| Southeast region | 175 | 381 | 425 | 721 | |||||||||||||||||||
| Total new orders, net | 1,291 | 1,854 | 2,432 | 3,296 | |||||||||||||||||||
| As of March 31, | |||||||||||||||||||||||
| Backlog units: | 2022 | 2021 | |||||||||||||||||||||
| West region | 1,872 | 1,864 | |||||||||||||||||||||
| East region | 634 | 757 | |||||||||||||||||||||
| Southeast region | 615 | 682 | |||||||||||||||||||||
| Total backlog units | 3,121 | 3,303 | |||||||||||||||||||||
| Aggregate dollar value of homes in backlog (in millions) | $ | 1,583.5 | $ | 1,386.4 | |||||||||||||||||||
| ASP in backlog (in thousands) | $ | 507.4 | $ | 419.7 | |||||||||||||||||||
| in thousands | Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||||||||
| SUPPLEMENTAL FINANCIAL DATA | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||
| Homebuilding revenue: | |||||||||||||||||||||||
| West region | $ | 302,887 | $ | 277,843 | $ | 559,379 | $ | 510,783 | |||||||||||||||
| East region | 128,424 | 151,993 | 242,711 | 249,957 | |||||||||||||||||||
| Southeast region | 75,897 | 117,581 | 151,847 | 210,906 | |||||||||||||||||||
| Total homebuilding revenue | $ | 507,208 | $ | 547,417 | $ | 953,937 | $ | 971,646 | |||||||||||||||
| Revenue: | |||||||||||||||||||||||
| Homebuilding | $ | 507,208 | $ | 547,417 | $ | 953,937 | $ | 971,646 | |||||||||||||||
| Land sales and other | 1,298 | 2,472 | 8,718 | 6,782 | |||||||||||||||||||
| Total revenue | $ | 508,506 | $ | 549,889 | $ | 962,655 | $ | 978,428 | |||||||||||||||
| Gross profit: | |||||||||||||||||||||||
| Homebuilding | $ | 119,402 | $ | 97,456 | $ | 212,706 | $ | 172,293 | |||||||||||||||
| Land sales and other | 348 | 470 | 4,444 | 926 | |||||||||||||||||||
| Total gross profit | $ | 119,750 | $ | 97,926 | $ | 217,150 | $ | 173,219 | |||||||||||||||
Reconciliation of homebuilding gross profit and the related gross margin excluding impairments and abandonments and interest amortized to cost of sales 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. These measures should not be considered alternative to homebuilding gross profit and gross margin determined in accordance with GAAP as an indicator of operating performance.
| Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||||||||||||||
| in thousands | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||||
| Homebuilding gross profit/margin | $ | 119,402 | 23.5 | % | $ | 97,456 | 17.8 | % | $ | 212,706 | 22.3 | % | $ | 172,293 | 17.7 | % | |||||||||||||||||||
| Inventory impairments and abandonments (I&A) | 495 | — | 495 | 465 | |||||||||||||||||||||||||||||||
| Homebuilding gross profit/margin excluding I&A | 119,897 | 23.6 | % | 97,456 | 17.8 | % | 213,201 | 22.3 | % | 172,758 | 17.8 | % | |||||||||||||||||||||||
| Interest amortized to cost of sales | 16,083 | 24,110 | 30,863 | 42,670 | |||||||||||||||||||||||||||||||
| Homebuilding gross profit/margin excluding I&A and interest amortized to cost of sales | $ | 135,980 | 26.8 | % | $ | 121,566 | 22.2 | % | $ | 244,064 | 25.6 | % | $ | 215,428 | 22.2 | % | |||||||||||||||||||
Reconciliation of Adjusted EBITDA to total company net income, 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. These EBITDA measures should not be considered alternatives to net income determined in accordance with GAAP as an indicator of operating performance.
| Three Months Ended March 31, | Six Months Ended March 31, | LTM Ended March 31, (a) | |||||||||||||||||||||||||||||||||
| in thousands | 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | |||||||||||||||||||||||||||||
| Net income | $ | 44,672 | $ | 24,528 | $ | 79,557 | $ | 36,525 | $ | 165,053 | $ | 75,391 | |||||||||||||||||||||||
| Expense from income taxes | 10,071 | 7,672 | 16,531 | 11,786 | 26,246 | 25,508 | |||||||||||||||||||||||||||||
| Interest amortized to home construction and land sales expenses and capitalized interest impaired | 16,083 | 24,110 | 30,863 | 42,923 | 75,230 | 96,256 | |||||||||||||||||||||||||||||
| Interest expense not qualified for capitalization | — | 969 | — | 2,569 | 212 | 7,667 | |||||||||||||||||||||||||||||
| EBIT | 70,826 | 57,279 | 126,951 | 93,803 | 266,741 | 204,822 | |||||||||||||||||||||||||||||
| Depreciation and amortization | 3,031 | 3,683 | 5,912 | 6,805 | 13,083 | 15,391 | |||||||||||||||||||||||||||||
| EBITDA | 73,857 | 60,962 | 132,863 | 100,608 | 279,824 | 220,213 | |||||||||||||||||||||||||||||
| Stock-based compensation expense | 2,424 | 2,549 | 4,532 | 6,060 | 10,639 | 12,886 | |||||||||||||||||||||||||||||
| Loss on extinguishment of debt | 164 | 563 | 164 | 563 | 1,626 | 563 | |||||||||||||||||||||||||||||
Inventory impairments and abandonments (b) | 935 | — | 935 | 465 | 1,323 | 2,576 | |||||||||||||||||||||||||||||
| Restructuring and severance expenses | — | — | — | (10) | — | 1,307 | |||||||||||||||||||||||||||||
| Litigation settlement in discontinued operations | — | 120 | — | 120 | — | 1,380 | |||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 77,380 | $ | 64,194 | $ | 138,494 | $ | 107,806 | $ | 293,412 | $ | 238,925 | |||||||||||||||||||||||
(a) "LTM" indicates amounts for the trailing 12 months.
(b) In periods during which we impaired certain of our inventory assets, capitalized interest that is impaired is included in the line above titled "Interest amortized to home construction and land sales expenses and capitalized interest impaired."