ATLANTA, July 28 /PRNewswire/ -- Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com ) today announced results for the quarter ended June 30, 1999, the third quarter of its 1999 fiscal year. Highlights of the quarter, compared to the same quarter of the prior year, are as follows:

    *  Diluted EPS: $1.15 (up 80% vs. $.64 in prior year)
    *  Home closings: 1,961 (up 31%)
    *  Total revenues: $370 million (up 58%)
    *  Earnings before interest, taxes, depreciation and amortization (EBITDA)
       $24.5 million (up 66%)
    *  Pretax margin 4.5% (up 60 basis points)
    *  Net income: $10.3 million (up 82%)
    *  New orders: 2,134 (up 8%)
    *  Record dollar backlog: $613 million (up 40%)

Earnings Increase Reflect Continuing Improvement in Margins

Ian McCarthy, President and Chief Executive Officer of Beazer Homes, said, "We are pleased to report, for the sixth consecutive quarter, an increase in earnings that is higher than the increase in our home closings. During the quarter ended June 30, 1999 our earnings per share increased by 80%, to $1.15 a share, on a 31% increase in home closings. This increase was driven by a 60 basis point improvement in our pretax margin. As we have discussed in past quarters, we believe that this improvement reflects principally the success of our profitability improvement initiatives, as well as a very strong homebuilding environment."

Positive Order Trend Accelerating

The Company also reported that it had 2,134 new orders for the quarter ended June 30, 1999, an 8% increase over the year earlier June quarter. The Company's backlog of homes sold but not yet closed at June 30, 1999 was 3,295 homes (up 21%) with a sales value of $613 million (up 40%), both Company records.

Mr. McCarthy commented, "The 8% increase in our new orders during the June quarter is double the 4% increase that we reported in the March quarter. This acceleration in our new order trend results both from the continued healthy homebuilding environment and the success of our individual subdivisions. We expect this acceleration to continue in the September quarter, as a result of both the continuing strong market and an easier comparison in the September 1998 quarter than in the June 1998 quarter. New orders in the September 1998 quarter were up only 11% compared to a 24% increase in the June 1998 quarter."

Beazer Strengthens Its Presence On the Internet

On June 22, 1999, Beazer Homes announced an agreement with NewHomeNetwork.com, the most trafficked national new home web site, to add all of its 250 communities to the site. Commencing in August 1999, Beazer's communities and homes will be featured with detailed descriptions and enhanced visual information, including virtual tours (featuring 360-degree interior and exterior images) and links to Beazer's own web site beazer.com.

Mr. McCarthy said, "We are extremely pleased to be the first national homebuilder to form an alliance with NewHomeNetwork.com, the number one destination for new home shoppers on the internet. Our affiliation with NewHomeNetwork.com is just part of our commitment to the internet. Our own web site at www.beazer.com, is already one of the top-rated homebuilder internet sites and we will soon announce significant upgrades to our site."

Mr. McCarthy continued, "We recognize that the internet is fundamentally changing the ways we can reach out to and communicate with homebuyers. Beazer Homes intends beazer.com to be at the forefront of this rapid evolution and the destination of choice for the new home internet shopper."

Completion of Conversion of Preferred Stock

During the quarter ended June 30, 1999, the Company completed the redemption and conversion of its preferred stock. Holders of 99.9% of the original two million shares of preferred stock had converted their shares to common stock, with only 2,164 shares being redeemed for cash.

David Weiss, Executive Vice President and Chief Financial Officer of Beazer Homes, said, "We are extremely pleased that the holders of substantially all of our preferred stock have converted their shares to common stock. This conversion removes an overhang on our common stock, simplifies our capital structure and eliminates a $4 million annual cash dividend."

Mr. Weiss added, "We end our third fiscal quarter in a very strong financial position, with only $62 million drawn on our $200 million revolving credit facility and our debt to total capitalization ratio at 56%, down from $75 million and 58%, respectively, at March 31, 1999. We expect that borrowings at September 30, the end of our fiscal year, will be reduced further and that our debt to total capitalization will approximate 50%."

Plan For The Next Five Years

Mr. McCarthy said, "Earlier this year we introduced our plan "Beazer Homes: The Next Five Years." As part of this plan we projected that we would earn $4.00 in fiscal 1999, the beginning point of our five year plan. We also disclosed that our target was to more than double EPS to $9.00 per share over the next five years. With the strong increase in earnings in our June quarter, we now believe that we can beat our original estimate for fiscal 1999. Further, our improving profitability, strong backlog and accelerating new order trend give us confidence in a further increase in fiscal 2000. The homebuilding market remains strong, we continue to enhance our performance and we have the financial resources and flexibility to continue to take advantage of opportunities."

Beazer Homes USA, Inc., based in Atlanta, Georgia, is one of the country's ten largest single family homebuilders, with operations in Arizona, California, Florida, Georgia, Maryland, Nevada, New Jersey, North Carolina, South Carolina, Tennessee, Texas and Virginia.

Note: Certain statements in this Press Release are "forward-looking statements" within the meaning of the Private Securities Litigation Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such risks, uncertainties and other factors include, but are not limited to, changes in general economic conditions, fluctuations in interest rates, increases in raw materials and labor costs, levels of competition and other factors described in the Company's Annual Report for the year ended September 30, 1998.

                              BEAZER HOMES USA, INC.
                    CONSOLIDATED OPERATING AND FINANCIAL DATA
                 (Dollars in thousands, except per share amounts)

    Financial Data:
                               Quarter Ended             Nine Months Ended
                                  June 30,                   June 30,
                             1999         1998          1999         1998
    INCOME STATEMENT
    Revenues              $370,431      $234,811     $939,885     $611,760
    Costs and expenses:
      Home construction
       and land sales      306,424       194,380      779,632      510,173
      Interest               6,472         4,914       17,769       12,232
      Selling, general and
       administrative
       expense              40,571        26,703      104,689       71,597
    Operating income        16,964         8,814       37,796       17,758
    Other income (expense)    (294)          252         (364)         453

    Income before income
     taxes                  16,670         9,066       37,432       18,211
    Income taxes             6,418         3,445       14,410        6,965
    Net income             $10,252        $5,621      $23,022      $11,246

    Dividends and other
     payments to preferred
     shareholders              $36        $1,000       $3,343       $3,000
    Net income to common
     shareholders:
      Basic                $10,216        $4,621      $19,679       $8,246
      Diluted              $10,252        $5,621      $23,022      $11,246

    Net income per share:
      Basic                  $1.23         $0.79        $2.85        $1.41
      Diluted                $1.15         $0.64        $2.58        $1.29

    Weighted average shares
     outstanding, in thousands:
      Basic                  8,285         5,886        6,908        5,857
      Diluted                8,919         8,772        8,922        8,737

    Interest incurred       $6,962        $5,525      $19,981      $15,440
    Depreciation and
     amortization           $1,388          $774       $3,449       $2,118


    SELECTED BALANCE SHEET DATA         June 30,
                                          1999

    Cash                                   $---
    Inventory                            563,059
    Total assets                         622,594
    Total debt                           277,000
    Stockholders' equity                 219,766

                              BEAZER HOMES USA, INC.
              CONSOLIDATED OPERATING AND FINANCIAL DATA (Continued)
                             (Dollars in thousands)

    Operating Data:

                                 Quarter Ended           Nine Months Ended
                                   June 30,                   June 30,
    SELECTED OPERATING DATA   1999          1998         1999         1998
    Closings:
      Southeast region         796           608        2,039        1,584
      Southwest region         734           750        2,054        1,882
      Central region           163           139          427          442
      Mid-Atlantic region      268           ---          638          ---
    Total closings           1,961         1,497        5,158        3,908
    New orders, net of
     cancellations (A):
      Southeast region         880           767        2,435        2,125
      Southwest region         778           971        2,254        2,602
      Central region           147           245          355          619
      Mid-Atlantic region      329           ---          797          ---
    Total new orders         2,134         1,983        5,841        5,346
    Backlog at end of period 3,295         2,726
    Dollar value of backlog
     at end of period     $612,552      $438,996
    Active subdivisions:
      Southeast region         112           119
      Southwest region          68            62
      Central region            28            33
      Mid-Atlantic region       42           ---
    Total active subdivisions  250           214


                                Quarter Ended            Nine Months Ended
                                  June 30,                    June 30,
    SUPPLEMENTAL FINANCIAL    1999          1998         1999         1998
     DATA:

    Revenues
      Home sales          $365,481      $231,654     $930,158     $598,756
      Land and lot sales     3,553         1,961        4,555       10,524
      Mortgage origination
       revenue               3,467         2,168       10,192        4,883
      Intercompany
       elimination -
       mortgage             (2,070)         (972)      (5,020)      (2,403)
    Total revenues        $370,431      $234,811     $939,885     $611,760
    Cost of home
     construction and
     land sales
      Home sales          $305,521      $193,427     $780,874     $502,431
      Land and lot sales     2,973         1,925        3,778       10,145
      Intercompany
       elimination -
       mortgage             (2,070)         (972)       (5,020)     (2,403)
    Total costs of home
     construction and
     land sales           $306,424      $194,380     $779,632     $510,173
    Selling, general and
     administrative
      Homebuilding operations $38,437    $25,562      $98,728      $68,928
      Mortgage origination
       operations            2,134         1,141        5,961        2,669
    Total selling, general
     and administrative    $40,571       $26,703     $104,689      $71,597

    (A)  New orders for the nine months ended June 30, 1999 and 1998 do not
         include 555 and 96, respectively, homes in backlog acquired in
         business acquisitions.

SOURCE  Beazer Homes USA, Inc.