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8-K - FORM 8-K - BEAZER HOMES USA INC | d295052d8k.htm |
EXHIBIT 99.1
PRESS RELEASE
Beazer Homes Reports First Quarter Fiscal 2012 Results
ATLANTA, February 2, 2012 Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the quarter ended December 31, 2011.
I am pleased with our results for the quarter, said Allan Merrill, President and Chief Executive Officer of Beazer Homes. In spite of still challenging market conditions, our team managed to generate a 36% improvement in year-over-year new home orders while reducing overhead costs in dollar and percentage terms. While we have a lot of work in front of us to return to sustainable profitability, we are committed to delivering higher orders and closings as well as positive EBITDA for the full fiscal year.
Summary results of the quarter are as follows:
As of December 31, 2011
| Total cash and cash equivalents: $550 million, including unrestricted cash of approximately $273 million |
| Stockholders equity: $200 million, not including $57.5 million of mandatory convertible subordinated notes, which automatically convert to common stock at maturity in 2013 |
| Total backlog from continuing operations: 1,307 homes with a sales value of $315.8 million, compared to 787 homes with a sales value of $198.0 million as of December 31, 2010 |
| Land and lots controlled: 25,998 lots (84% owned), a decrease of 3% from December 31, 2010 |
Quarter Ended December 31, 2011 Results from Continuing Operations (unless otherwise specified)
| Total new orders: 724 homes, a 36% increase from fiscal 2011 |
- | Cancellation rates: 35.1%, compared with 31.4% in fiscal 2011 |
| Total home closings: 867 homes, a 67% increase from fiscal 2011 |
| Revenue: $188.5 million, compared to $109.0 million in fiscal 2011 |
- | Average sales price from closings: $215,500, compared with $209,300 in fiscal 2011 |
| Gross profit margin: 11.8%, compared to 10.3% in fiscal 2011. These margins were impacted by $3.5 million and $0.6 million in fiscal 2012 and fiscal 2011, respectively, for impairments and option |
EXHIBIT 99.1
contract abandonments. In addition, these margins were impacted by an $11.0 million warranty recovery in fiscal 2012 and a $1.4 million warranty recovery in fiscal 2011. |
- | Homebuilding gross profit margin, excluding impairments and abandonments: 13.3%, compared to 10.7% in fiscal 2011 |
- | Homebuilding gross profit margin, excluding impairments, abandonments and interest amortized to cost of sales: 20.2%, compared to 17.0% in fiscal 2011. Excluding the warranty-related items mentioned above, these margins would have been: 14.3%, compared to 15.8% in fiscal 2011 |
| Net income from continuing operations: $0.7 million, or diluted earnings per share of $0.01, including non-cash pre-tax charges of $3.5 million for inventory impairments and a benefit from income taxes of $35.7 million. This compared to a loss from continuing operations in the first quarter of fiscal 2011 of $48.3 million, or $0.65 per share, which included non-cash pre-tax charges of $0.6 million for inventory impairments. |
| Net income: $739,000 (including net income from discontinued operations of $41,000), compared with a net loss of $48.8 million for fiscal 2011 (including a loss from discontinued operations of $0.5 million.) |
| Total Company land and land development spending: $58.2 million, compared with $62.6 million in fiscal 2011 |
Conference Call
The Company will hold a conference call on February 2, 2012 at 10:00 am EST to discuss these results. Interested parties may listen to the conference call and view the Companys slide presentation over the internet by visiting the Investor Relations section of the Companys website at www.beazer.com. To access the conference call by telephone, listeners should dial 800-619-8639. To be admitted to the call, verbally supply the passcode "BZH". A replay of the call will be available shortly after the conclusion of the live call. To directly access the replay, dial 866-413-9161 or 203-369-0666 and enter the passcode 3740 (available until 11:00 pm ET on February 9, 2012), or visit www.beazer.com. A replay of the webcast will be available at www.beazer.com for approximately 30 days.
Beazer Homes USA Inc., headquartered in Atlanta, Georgia, is one of the ten largest single-family homebuilders in the United States. The Companys industry-leading high performance homes are designed to lower the total cost of home ownership while reducing energy and water consumption. With award-winning floor-plans, the Company offers homes that incorporate exceptional value and quality to consumers in 16 states, including Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange and trades under the ticker symbol BZH.
Forward Looking Statements
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
EXHIBIT 99.1
results discussed in the forward-looking statements, including, among other things, (i) the final outcome of various putative class action lawsuits, multi-party suits and similar proceedings as well as the results of any other litigation or government proceedings and fulfillment of the obligations in the Deferred Prosecution Agreement and consent orders with governmental authorities and other settlement agreements; (ii) additional asset impairment charges or writedowns; (iii) economic changes nationally or in local markets, including changes in consumer confidence, declines in employment levels, volatility of mortgage interest rates and inflation; (iv) the effect of changes in lending guidelines and regulations and the uncertain availability of mortgage financing; (v) a slower economic rebound than anticipated, coupled with persistently high unemployment and additional foreclosures; (vi) continued or increased downturn in the homebuilding industry; (vii) estimates related to homes to be delivered in the future (backlog) are imprecise as they are subject to various cancellation risks which cannot be fully controlled, (viii) our cost of and ability to access capital and otherwise meet our ongoing liquidity needs including the impact of any downgrades of our credit ratings or reductions in our tangible net worth or liquidity levels; (ix) potential inability to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing; (x) increased competition or delays in reacting to changing consumer preference in home design; (xi) shortages of or increased prices for labor, land or raw materials used in housing production; (xii) factors affecting margins such as decreased land values underlying lot option agreements, increased land development costs on communities under development or delays or difficulties in implementing initiatives to reduce production and overhead cost structure; (xiii) the performance of our joint ventures and our joint venture partners; (xiv) the impact of construction defect and home warranty claims including those related to possible installation of drywall imported from China; (xv) the cost and availability of insurance and surety bonds; (xvi) delays in land development or home construction resulting from adverse weather conditions; (xvii) potential delays or increased costs in obtaining necessary permits and possible penalties for failure to comply with laws, regulations and governmental policies; (xviii) potential exposure related to additional repurchase claims on mortgages and loans originated by Beazer Mortgage Corp.; (xix) estimates related to the potential recoverability of our deferred tax assets; (xx) effects of changes in accounting policies, standards, guidelines or principles; or (xxi) terrorist acts, acts of war and other factors over which the Company has little or no control.
Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time and it is not possible for management to predict all such factors.
CONTACT: Beazer Homes USA, Inc.
Carey Phelps
Director, Investor Relations & Corporate Communications
770-829-3700
investor.relations@beazer.com
-Tables Follow-
EXHIBIT 99.1
BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended December 31, |
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2011 | 2010 | |||||||
Total revenue |
$ | 188,548 | $ | 108,952 | ||||
Home construction and land sales expenses |
162,776 | 97,051 | ||||||
Inventory impairments and option contract abandonments |
3,503 | 639 | ||||||
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|
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Gross profit |
22,269 | 11,262 | ||||||
Commissions |
8,371 | 4,990 | ||||||
General and administrative expenses |
28,194 | 32,503 | ||||||
Depreciation and amortization |
2,403 | 1,905 | ||||||
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Operating loss |
(16,699 | ) | (28,136 | ) | ||||
Equity in (loss) income of unconsolidated joint ventures |
(77 | ) | 238 | |||||
Loss on extinguishment of debt |
| (2,902 | ) | |||||
Other expense, net |
(18,273 | ) | (18,065 | ) | ||||
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Loss from continuing operations before income taxes |
(35,049 | ) | (48,865 | ) | ||||
Benefit from income taxes |
(35,747 | ) | (593 | ) | ||||
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Income (loss) from continuing operations |
698 | (48,272 | ) | |||||
Income (loss) from discontinued operations, net of tax |
41 | (536 | ) | |||||
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Net income (loss) |
$ | 739 | $ | (48,808 | ) | |||
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Weighted average number of shares: |
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Basic |
74,165 | 73,878 | ||||||
Diluted |
87,106 | 73,878 | ||||||
Earning (loss) per share: |
||||||||
Basic earning (loss) per share from continuing operations |
$ | 0.01 | $ | (0.65 | ) | |||
Basic earnings (loss) per share from discontinued operations |
$ | | $ | (0.01 | ) | |||
Basic earnings (loss) per share |
$ | 0.01 | $ | (0.66 | ) | |||
Diluted earning (loss) per share from continuing operations |
$ | 0.01 | $ | (0.65 | ) | |||
Diluted earnings (loss) per share from discontinued operations |
$ | | $ | (0.01 | ) | |||
Diluted earnings (loss) per share |
$ | 0.01 | $ | (0.66 | ) |
Interest Data: | Three Months Ended December 31, |
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2011 | 2010 | |||||||
Capitalized interest in inventory, beginning of period |
$ | 45,973 | $ | 36,884 | ||||
Interest Incurred |
32,525 | 32,366 | ||||||
Capitalized interest impaired |
(28 | ) | | |||||
Interest expense not qualified for capitalization and included as other expense |
(19,117 | ) | (18,923 | ) | ||||
Capitalized interest amortized to house construction and land sales expenses |
(12,843 | ) | (6,894 | ) | ||||
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Capitalized interest in inventory, end of period |
$ | 46,510 | $ | 43,433 | ||||
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EXHIBIT 99.1
BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
December 31, 2011 |
September 30, 2011 |
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ASSETS |
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Cash and cash equivalents |
$ | 272,524 | $ | 370,403 | ||||
Restricted cash |
277,241 | 277,058 | ||||||
Accounts receivable (net of allowance of $3,875 and $3,872, respectively) |
27,967 | 28,303 | ||||||
Income tax receivable |
3,081 | 4,823 | ||||||
Inventory |
||||||||
Owned inventory |
1,178,237 | 1,192,380 | ||||||
Land not owned under option agreements |
14,625 | 11,753 | ||||||
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Total inventory |
1,192,862 | 1,204,133 | ||||||
Investments in unconsolidated joint ventures |
21,489 | 9,467 | ||||||
Deferred tax assets, net |
5,932 | 2,760 | ||||||
Property, plant and equipment, net |
22,589 | 22,613 | ||||||
Previously owned rental homes, net |
17,604 | 11,347 | ||||||
Other assets |
32,568 | 46,570 | ||||||
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Total assets |
$ | 1,873,857 | $ | 1,977,477 | ||||
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LIABILITIES AND STOCKHOLDERS EQUITY |
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Trade accounts payable |
$ | 46,395 | $ | 72,695 | ||||
Other liabilities |
131,420 | 212,187 | ||||||
Obligations related to land not owned under option agreements |
6,874 | 5,389 | ||||||
Total debt (net of discounts of $22,278 and $23,243, respectively) |
1,488,785 | 1,488,826 | ||||||
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Total liabilities |
1,673,474 | 1,779,097 | ||||||
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Stockholders equity: |
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Preferred stock (par value $.01 per share, 5,000,000 shares authorized, no shares issued) |
| | ||||||
Common stock (par value $0.001 per share, 180,000,000 shares authorized, 76,406,697 and 75,588,396 issued and outstanding, respectively) |
76 | 76 | ||||||
Paid-in capital |
626,014 | 624,750 | ||||||
Accumulated deficit |
(425,707 | ) | (426,446 | ) | ||||
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Total stockholders equity |
200,383 | 198,380 | ||||||
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Total liabilities and stockholders equity |
$ | 1,873,857 | $ | 1,977,477 | ||||
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Inventory Breakdown |
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Homes under construction |
$ | 253,904 | $ | 277,331 | ||||
Development projects in progress |
433,306 | 424,055 | ||||||
Land held for future development |
384,938 | 384,761 | ||||||
Land held for sale |
12,054 | 12,837 | ||||||
Capitalized interest |
46,510 | 45,973 | ||||||
Model homes |
47,525 | 47,423 | ||||||
Land not owned under option agreements |
14,625 | 11,753 | ||||||
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Total inventory |
$ | 1,192,862 | $ | 1,204,133 | ||||
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EXHIBIT 99.1
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA CONTINUING OPERATIONS
Quarter
Ended December 31, |
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SELECTED OPERATING DATA | 2011 | 2010 | ||||||
Closings: |
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West region |
370 | 216 | ||||||
East region |
310 | 202 | ||||||
Southeast region |
187 | 101 | ||||||
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Continuing Operations |
867 | 519 | ||||||
Discontinued Operations |
15 | 30 | ||||||
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Total closings |
882 | 549 | ||||||
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New orders, net of cancellations: |
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West region |
303 | 174 | ||||||
East region |
249 | 257 | ||||||
Southeast region |
172 | 103 | ||||||
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Continuing Operations |
724 | 534 | ||||||
Discontinued Operations |
| 19 | ||||||
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Total new orders |
724 | 553 | ||||||
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Backlog units at end of period: |
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West region |
503 | 227 | ||||||
East region |
577 | 421 | ||||||
Southeast region |
227 | 139 | ||||||
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Continuing Operations |
1,307 | 787 | ||||||
Discontinued Operations |
2 | 13 | ||||||
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Total backlog units |
1,309 | 800 | ||||||
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Dollar value of backlog at end of period (in millions) |
$ | 316.3 | $ | 201.1 | ||||
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Revenue (in thousands): |
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West region |
$ | 70,777 | $ | 39,548 | ||||
East region |
81,818 | 50,214 | ||||||
Southeast region |
35,568 | 19,190 | ||||||
Pre-owned homes |
385 | | ||||||
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Total revenue |
$ | 188,548 | $ | 108,952 | ||||
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EXHIBIT 99.1
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA CONTINUING OPERATIONS
(Dollars in thousands)
Quarter Ended December 31, |
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SUPPLEMENTAL FINANCIAL DATA | 2011 | 2010 | ||||||
Revenues |
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Homebuilding operations |
$ | 186,852 | $ | 108,639 | ||||
Land sales and other |
1,696 | 313 | ||||||
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Total revenues |
$ | 188,548 | $ | 108,952 | ||||
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Gross profit |
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Homebuilding operations |
$ | 21,352 | $ | 10,951 | ||||
Land sales and other |
917 | 311 | ||||||
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Total gross profit |
$ | 22,269 | $ | 11,262 | ||||
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Reconciliation of homebuilding gross profit before impairments and abandonments and interest amortized to cost of sales and the related gross margins to homebuilding gross profit and gross margin, the most directly comparable GAAP measure, is provided for each period discussed below:
Quarter Ended December 31, |
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2011 | 2010 | |||||||||||||||
Homebuilding gross profit |
$ | 21,352 | 11.4 | % | $ | 10,951 | 10.1 | % | ||||||||
Inventory impairments and lot option abandonments (I&A) |
3,503 | 639 | ||||||||||||||
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Homebuilding gross profit before I&A |
24,855 | 13.3 | % | 11,590 | 10.7 | % | ||||||||||
Interest amortized to cost of sales |
12,843 | 6,894 | ||||||||||||||
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Homebuilding gross profit before I&A and interest amortized to cost of sales |
$ | 37,698 | 20.2 | % | $ | 18,484 | 17.0 | % | ||||||||
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Reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization and impairments) to net income (loss), the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective capitalization, tax position and level of impairments.
Quarter Ended | ||||||||
December 31, | ||||||||
2011 | 2010 | |||||||
Net income (loss) |
$ | 739 | $ | (48,808 | ) | |||
Benefit from income taxes |
(36,146 | ) | (599 | ) | ||||
Interest expense |
31,988 | 25,817 | ||||||
Depreciation and amortization |
3,703 | 4,878 | ||||||
Impairments and abandonments |
3,507 | 921 | ||||||
Joint venture impairments |
29 | 267 | ||||||
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Adjusted EBITDA |
$ | 3,820 | $ | (17,524 | ) | |||
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