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): February 2, 2023
(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 February 2, 2023 , Beazer Homes USA, Inc. issued a press release announcing results of operations for the three months ended December 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 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 First Quarter Fiscal 2023 Results
ATLANTA, February 2, 2023 - Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three months ended December 31, 2022.
“Despite a challenging new home sales environment, we generated strong first quarter financial results,” said Allan P. Merrill, the company’s Chairman and Chief Executive Officer. “Year-over-year increases in home prices, healthy gross margins and careful management of overhead costs led to $24 million of net income, $47 million in Adjusted EBITDA and $0.80 of earnings per share.”
Commenting on current market conditions, Mr. Merrill said, “The environment for new home sales was extraordinarily challenging early in the first quarter as 30-year mortgage rates moved above 7%, worsening an already difficult affordability equation for most home buyers. Toward the end of the quarter, as mortgage rates fell modestly, we experienced improved online and in-person visits, which led to a meaningful acceleration in our new home orders in January. We will continue to make necessary adjustments to home pricing, incentives and included features to remain competitive, while pursuing our efforts to reduce cycle times and construction costs.”
Looking further out, Mr. Merrill concluded, “We remain confident in the multi-year growth of our business and the underlying strength of the new home industry. The gap between the structural 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. With a seasoned operating team, an ample supply of lots and a more efficient and less leveraged balance sheet, we remain confident that we will be able to create durable value for our stakeholders in the years ahead.”
Beazer Homes Fiscal First Quarter 2023 Highlights and Comparison to Fiscal First Quarter 2022
•Net income from continuing operations of $24.4 million, or $0.80 per diluted share, compared to net income from continuing operations of $34.9 million, or $1.14 per diluted share, in fiscal first quarter 2022
•Adjusted EBITDA of $47.1 million, down 22.9%
•Homebuilding revenue of $444.1 million, down 0.6% on a 18.3% decrease in home closings to 833, partially offset by a 21.6% increase in average selling price to $533.1 thousand
•Homebuilding gross margin was 19.2%, down 170 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 22.3%, down 190 basis points
•SG&A as a percentage of total revenue was 12.3%, up 50 basis points
•Net new orders of 482, down 57.8% on a 60.1% decrease in orders/community/month to 1.3, partially offset by a 5.8% increase in average community count to 121
•Backlog dollar value of $940.9 million, down 33.0% on a 40.2% decrease in backlog units to 1,740, partially offset by a 11.9% increase in average selling price of homes in backlog to $540.8 thousand
•Controlled lots of 24,735, up 7.3% from 23,049
•Land acquisition and land development spending was $114.7 million, down 12.2% from $130.7 million
•Unrestricted cash at quarter end was $120.7 million; total liquidity was $385.7 million
The following provides additional details on the Company's performance during the fiscal first quarter 2023:
Profitability. Net income from continuing operations was $24.4 million, generating diluted earnings per share of $0.80. This included the impact of energy efficiency tax credits of $3.0 million or $0.10 per share compared to $3.2 million of such credits or $0.10 per share in the prior year quarter. First quarter adjusted EBITDA of $47.1 million was down $14.0 million, or 22.9%, primarily due to lower gross margin.
Orders. Net new orders for the first quarter decreased to 482, down 57.8% from 1,141 in the prior year period. The decrease in net new orders was driven by a 60.1% decrease in sales pace to 1.3 orders per community per month, down from 3.3 in the prior year period. The cancellation rate for the quarter was 37.1%, up from 11.8% in the
previous year, reflecting the weakening in housing demand as a result of elevated mortgage rates. Our cancellations as a percentage of fiscal 2023 first quarter beginning backlog was 13.6%.
Backlog. The dollar value of homes in backlog as of December 31, 2022 was $940.9 million, representing 1,740 homes, compared to $1.4 billion, representing 2,908 homes, at the same time last year. The average selling price of homes in backlog was $540.8 thousand, up 11.9% versus the previous year.
Homebuilding Revenue. First quarter homebuilding revenue was $444.1 million, relatively flat year-over-year on a 21.6% increase in the average selling price to $533.1 thousand, which was more than offset by an 18.3% decrease in home closings to 833 homes.
Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 22.3% for the first quarter, down 190 basis points year-over-year. The reduction in gross margin reflected an increase in price concessions as demand weakened.
SG&A Expenses. Selling, general and administrative expenses as a percentage of total revenue was 12.3% for the quarter, up 50 basis points year-over-year primarily due to decreases in closings and revenue, while SG&A on an absolute dollar basis increased by $1.2 million, or 2.2%, year-over-year.
Land Position. Controlled lots increased 7.3% to 24,735, compared to 23,049 from the prior year. Excluding land held for future development and land held for sale lots, active lots controlled were 23,962, up 6.8% year-over-year. Compared to prior fiscal quarter, active controlled lots were down 435 lots, or 1.8%, as the Company continued to re-underwrite and re-negotiate land deals to reflect the current environment. As of December 31, 2022, the Company controlled 54.4% of its total active lots through option contracts compared to 54.6% a quarter ago and 49.2% a year ago. For the current fiscal quarter, land acquisition and land development spending was $114.7 million, down 12.2% year-over-year and down 24.0% sequentially from the prior fiscal quarter.
Liquidity. At the close of the first quarter, the Company had $385.7 million of available liquidity, including $120.7 million of unrestricted cash and $265.0 million of remaining capacity under the unsecured revolving credit facility.
Senior Unsecured Revolving Credit Facility. On October 13, 2022, the Company entered into a senior unsecured revolving credit facility with committed borrowing capacity of $265.0 million, which replaced a $250.0 million secured revolving credit facility.
Summary results for the three months ended December 31, 2022 are as follows:
| Three Months Ended December 31, | |||||||||||||||||
| 2022 | 2021 | Change* | |||||||||||||||
| New home orders, net of cancellations | 482 | 1,141 | (57.8) | % | |||||||||||||
| Orders per community per month | 1.3 | 3.3 | (60.1) | % | |||||||||||||
| Average active community count | 121 | 114 | 5.8 | % | |||||||||||||
| Actual community count at quarter-end | 119 | 116 | 2.6 | % | |||||||||||||
| Cancellation rates | 37.1 | % | 11.8 | % | 2,530 | bps | |||||||||||
| Total home closings | 833 | 1,019 | (18.3) | % | |||||||||||||
| Average selling price (ASP) from closings (in thousands) | $ | 533.1 | $ | 438.4 | 21.6 | % | |||||||||||
| Homebuilding revenue (in millions) | $ | 444.1 | $ | 446.7 | (0.6) | % | |||||||||||
| Homebuilding gross margin | 19.2 | % | 20.9 | % | -170 bps | ||||||||||||
| Homebuilding gross margin, excluding impairments and abandonments (I&A) | 19.2 | % | 20.9 | % | -170 bps | ||||||||||||
| Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 22.3 | % | 24.2 | % | -190 bps | ||||||||||||
| Income from continuing operations before income taxes (in millions) | $ | 28.6 | $ | 41.4 | (30.9) | % | |||||||||||
| Expense from income taxes (in millions) | $ | 4.2 | $ | 6.5 | (35.7) | % | |||||||||||
| Income from continuing operations, net of tax (in millions) | $ | 24.4 | $ | 34.9 | (30.1) | % | |||||||||||
| Basic income per share from continuing operations | $ | 0.81 | $ | 1.15 | (29.6) | % | |||||||||||
| Diluted income per share from continuing operations | $ | 0.80 | $ | 1.14 | (29.8) | % | |||||||||||
| Net income (in millions) | $ | 24.3 | $ | 34.9 | (30.3) | % | |||||||||||
| Land acquisition and land development spending (in millions) | $ | 114.7 | $ | 130.7 | (12.2) | % | |||||||||||
| Adjusted EBITDA (in millions) | $ | 47.1 | $ | 61.1 | (22.9) | % | |||||||||||
| LTM Adjusted EBITDA (in millions) | $ | 356.1 | $ | 280.2 | 27.1 | % | |||||||||||
* Change and totals are calculated using unrounded numbers.
"LTM" indicates amounts for the trailing 12 months.
| As of December 31, | |||||||||||||||||
| 2022 | 2021 | Change | |||||||||||||||
| Backlog units | 1,740 | 2,908 | (40.2) | % | |||||||||||||
| Dollar value of backlog (in millions) | $ | 940.9 | $ | 1,405.2 | (33.0) | % | |||||||||||
| ASP in backlog (in thousands) | $ | 540.8 | $ | 483.2 | 11.9 | % | |||||||||||
| Land and lots controlled | 24,735 | 23,049 | 7.3 | % | |||||||||||||
Conference Call
The Company will hold a conference call on February 2, 2023 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. 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 February 9, 2023 at 800-876-4058 (for international callers, dial 203-369-3575) 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 further deterioration in homebuilding industry conditions; (ii) continued 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) continued supply chain challenges negatively impacting our homebuilding production, including shortages of raw materials and other critical components such as windows, doors, and appliances; (v) continued shortages of or increased costs for labor used in housing production, and the level of quality and craftsmanship provided by such labor; (vi) 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; (vii) 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 agreement abandonments; (viii) factors affecting margins, such as adjustments to home pricing, increased sales incentives and mortgage rate buy down programs in order to remain competitive; decreased revenues; 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 cycle times and production and overhead cost structures; not being able to pass on cost increases (including cost increases due to increasing the energy efficiency of our homes) through pricing increases; (ix) 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; (x) 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; (xi) market perceptions regarding any capital raising initiatives we may undertake (including future issuances of equity or debt capital); (xii) changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes; (xiii) increased competition or delays in reacting to changing consumer preferences in home design; (xiv) 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; (xv) the potential recoverability of our deferred tax assets; (xvi) increases in corporate tax rates; (xvii) 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; (xviii) the results of litigation or government proceedings and fulfillment of any related obligations; (xix) the impact of construction defect and home warranty claims; (xx) the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred; (xxi) the impact of information technology failures, cybersecurity issues or data security breaches; (xxii) the impact of governmental regulations on homebuilding in key markets, such as regulations limiting the availability of water and electricity (including availability of electrical equipment such as transformers and meters); (xxiii) the success of our ESG initiatives, including our ability to meet our goal that by 2025 every home we build will be Net Zero Energy Ready, 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; and (xxiv) terrorist acts, protests and civil unrest, political uncertainty, acts of war or other factors over which the Company has no control.
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 | |||||||||||
| December 31, | |||||||||||
| in thousands (except per share data) | 2022 | 2021 | |||||||||
| Total revenue | $ | 444,928 | $ | 454,149 | |||||||
| Home construction and land sales expenses | 358,970 | 356,749 | |||||||||
| Inventory impairments and abandonments | 190 | — | |||||||||
| Gross profit | 85,768 | 97,400 | |||||||||
| Commissions | 14,105 | 15,813 | |||||||||
| General and administrative expenses | 40,648 | 37,767 | |||||||||
| Depreciation and amortization | 2,513 | 2,881 | |||||||||
| Operating income | 28,502 | 40,939 | |||||||||
| Loss on extinguishment of debt, net | (515) | — | |||||||||
| Other income, net | 576 | 419 | |||||||||
| Income from continuing operations before income taxes | 28,563 | 41,358 | |||||||||
| Expense from income taxes | 4,155 | 6,463 | |||||||||
| Income from continuing operations | 24,408 | 34,895 | |||||||||
| Loss from discontinued operations, net of tax | (77) | (10) | |||||||||
| Net income | $ | 24,331 | $ | 34,885 | |||||||
| Weighted-average number of shares: | |||||||||||
| Basic | 30,219 | 30,336 | |||||||||
| Diluted | 30,480 | 30,724 | |||||||||
| Basic income per share: | |||||||||||
| Continuing operations | $ | 0.81 | $ | 1.15 | |||||||
| Discontinued operations | — | — | |||||||||
| Total | $ | 0.81 | $ | 1.15 | |||||||
| Diluted income per share: | |||||||||||
| Continuing operations | $ | 0.80 | $ | 1.14 | |||||||
| Discontinued operations | — | — | |||||||||
| Total | $ | 0.80 | $ | 1.14 | |||||||
| Three Months Ended | |||||||||||
| December 31, | |||||||||||
| Capitalized Interest in Inventory | 2022 | 2021 | |||||||||
| Capitalized interest in inventory, beginning of period | $ | 109,088 | $ | 106,985 | |||||||
| Interest incurred | 17,830 | 18,311 | |||||||||
| Interest expense not qualified for capitalization and included as other expense | — | — | |||||||||
| Capitalized interest amortized to home construction and land sales expenses | (13,775) | (14,780) | |||||||||
| Capitalized interest in inventory, end of period | $ | 113,143 | $ | 110,516 | |||||||
BEAZER HOMES USA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
| in thousands (except share and per share data) | December 31, 2022 | September 30, 2022 | |||||||||
| ASSETS | |||||||||||
| Cash and cash equivalents | $ | 120,746 | $ | 214,594 | |||||||
| Restricted cash | 35,899 | 37,234 | |||||||||
Accounts receivable (net of allowance of $284 and $284, respectively) | 24,866 | 35,890 | |||||||||
| Income tax receivable | 9,597 | 9,606 | |||||||||
| Owned inventory | 1,779,223 | 1,737,865 | |||||||||
| Deferred tax assets, net | 152,769 | 156,358 | |||||||||
| Property and equipment, net | 23,990 | 24,566 | |||||||||
| Operating lease right-of-use assets | 8,914 | 9,795 | |||||||||
| Goodwill | 11,376 | 11,376 | |||||||||
| Other assets | 19,005 | 14,679 | |||||||||
| Total assets | $ | 2,186,385 | $ | 2,251,963 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
| Trade accounts payable | $ | 106,824 | $ | 143,641 | |||||||
| Operating lease liabilities | 10,187 | 11,208 | |||||||||
| Other liabilities | 122,444 | 174,388 | |||||||||
Total debt (net of debt issuance costs of $6,907 and $7,280, respectively) | 984,330 | 983,440 | |||||||||
| Total liabilities | 1,223,785 | 1,312,677 | |||||||||
| 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, 31,347,439 issued and outstanding and 30,880,138 issued and outstanding, respectively) | 31 | 31 | |||||||||
| Paid-in capital | 858,839 | 859,856 | |||||||||
| Retained earnings | 103,730 | 79,399 | |||||||||
| Total stockholders’ equity | 962,600 | 939,286 | |||||||||
| Total liabilities and stockholders’ equity | $ | 2,186,385 | $ | 2,251,963 | |||||||
| Inventory Breakdown | |||||||||||
| Homes under construction | $ | 759,545 | $ | 785,742 | |||||||
| Land under development | 782,628 | 731,190 | |||||||||
| Land held for future development | 19,879 | 19,879 | |||||||||
| Land held for sale | 18,583 | 15,674 | |||||||||
| Capitalized interest | 113,143 | 109,088 | |||||||||
| Model homes | 85,445 | 76,292 | |||||||||
| Total owned inventory | $ | 1,779,223 | $ | 1,737,865 | |||||||
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
| Three Months Ended December 31, | |||||||||||
| SELECTED OPERATING DATA | 2022 | 2021 | |||||||||
| Closings: | |||||||||||
| West region | 510 | 603 | |||||||||
| East region | 155 | 245 | |||||||||
| Southeast region | 168 | 171 | |||||||||
| Total closings | 833 | 1,019 | |||||||||
| New orders, net of cancellations: | |||||||||||
| West region | 248 | 655 | |||||||||
| East region | 120 | 236 | |||||||||
| Southeast region | 114 | 250 | |||||||||
| Total new orders, net | 482 | 1,141 | |||||||||
| As of December 31, | |||||||||||
| Backlog units: | 2022 | 2021 | |||||||||
| West region | 995 | 1,705 | |||||||||
| East region | 375 | 602 | |||||||||
| Southeast region | 370 | 601 | |||||||||
| Total backlog units | 1,740 | 2,908 | |||||||||
| Aggregate dollar value of homes in backlog (in millions) | $ | 940.9 | $ | 1,405.2 | |||||||
| ASP in backlog (in thousands) | $ | 540.8 | $ | 483.2 | |||||||
| in thousands | Three Months Ended December 31, | ||||||||||
| SUPPLEMENTAL FINANCIAL DATA | 2022 | 2021 | |||||||||
| Homebuilding revenue: | |||||||||||
| West region | $ | 274,322 | $ | 256,492 | |||||||
| East region | 86,031 | 114,287 | |||||||||
| Southeast region | 83,731 | 75,950 | |||||||||
| Total homebuilding revenue | $ | 444,084 | $ | 446,729 | |||||||
| Revenue: | |||||||||||
| Homebuilding | $ | 444,084 | $ | 446,729 | |||||||
| Land sales and other | 844 | 7,420 | |||||||||
| Total revenue | $ | 444,928 | $ | 454,149 | |||||||
| Gross profit: | |||||||||||
| Homebuilding | $ | 85,114 | $ | 93,304 | |||||||
| Land sales and other | 654 | 4,096 | |||||||||
| Total gross profit | $ | 85,768 | $ | 97,400 | |||||||
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 December 31, | |||||||||||||||||
| in thousands | 2022 | 2021 | |||||||||||||||
| Homebuilding gross profit/margin | $ | 85,114 | 19.2 | % | $ | 93,304 | 20.9 | % | |||||||||
| Inventory impairments and abandonments (I&A) | 190 | — | |||||||||||||||
| Homebuilding gross profit/margin excluding I&A | 85,304 | 19.2 | % | 93,304 | 20.9 | % | |||||||||||
| Interest amortized to cost of sales | 13,775 | 14,780 | |||||||||||||||
| Homebuilding gross profit/margin excluding I&A and interest amortized to cost of sales | $ | 99,079 | 22.3 | % | $ | 108,084 | 24.2 | % | |||||||||
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 December 31, | LTM Ended December 31, (a) | |||||||||||||||||||
| in thousands | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||
| Net income | $ | 24,331 | $ | 34,885 | $ | 210,150 | $ | 144,909 | ||||||||||||
| Expense from income taxes | 4,133 | 6,460 | 50,940 | 23,847 | ||||||||||||||||
| Interest amortized to home construction and land sales expenses and capitalized interest impaired | 13,775 | 14,780 | 71,053 | 83,257 | ||||||||||||||||
| Interest expense not qualified for capitalization | — | — | — | 1,181 | ||||||||||||||||
| EBIT | 42,239 | 56,125 | 332,143 | 253,194 | ||||||||||||||||
| Depreciation and amortization | 2,513 | 2,881 | 12,992 | 13,735 | ||||||||||||||||
| EBITDA | 44,752 | 59,006 | 345,135 | 266,929 | ||||||||||||||||
| Stock-based compensation expense | 1,580 | 2,108 | 7,950 | 10,764 | ||||||||||||||||
| Loss on extinguishment of debt | 515 | — | 206 | 2,025 | ||||||||||||||||
Inventory impairments and abandonments(b) | 190 | — | 2,714 | 388 | ||||||||||||||||
| Severance expenses | 111 | — | 111 | — | ||||||||||||||||
| Litigation settlement in discontinued operations | — | — | — | 120 | ||||||||||||||||
| Adjusted EBITDA | $ | 47,148 | $ | 61,114 | $ | 356,116 | $ | 280,226 | ||||||||||||
(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."