Beazer Homes Reports Fourth Quarter and Full Year Fiscal 2009 Results
More News related to BZH
- SEC Seeks Civil Action Against Beazer Homes' (BZH) CEO McCarthy
- Beazer Homes' to Present at Investor Conferences
- Morning Movers 11/10: UPG, CYD, PCLN, FLL, BZH Higher; RHIE, OPXT, PRKR, PIKE, MBI, SDTH Lower
- Beazer Homes (BZH) Posts Q4 Profit On Early Debt Payment
- Beazer Homes USA (BZH) Swings to Q4 Profit
ATLANTA--(BUSINESS WIRE)-- Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the fiscal quarter and year ended September 30, 2009. Commencing with the fiscal quarter ended September 30, 2009, the Company has classified the results of operations historically included in its "Other Homebuilding" segment as discontinued operations in its consolidated statements of operations for all periods presented. Summary results of the quarter and fiscal year from continuing operations are as follows:
Quarter Ended September 30, 2009
-- Income from continuing operations of $35.3 million, or $0.87 per diluted
share, including non-cash pre-tax charges of $29.9 million for inventory
impairments and abandonment of land option contracts. The results also
include a pre-tax gain on early extinguishment of debt of $89.3 million,
as further described below. For the fourth quarter of the prior fiscal
year, the Company reported a loss from continuing operations of $(453.8)
million, or $(11.77) per share.
-- Total revenue: $376.3 million, compared to $649.8 million in the fourth
quarter of the prior year.
-- Home closings from continuing operations: 1,685 homes, a decrease
year-over-year of 24.3%.
-- New orders from continuing operations: 1,012 homes, an increase
year-over-year of 2.4%.
-- Cancellation rate improved to 34.7% in the fourth quarter compared to
46.3% in the fourth quarter of the prior year.
-- Gross profit margin of 6.6% (14.6% without impairments and
abandonments), compared to -0.7% (7.1% without impairments and
abandonments) in the fourth quarter of the prior year.
-- During the quarter, the Company repurchased $269.3 million of senior
notes for an aggregate purchase price of $189.5 million or an average
price of 70.4%, resulting in a pre-tax gain on early extinguishment of
debt of $75.0 million.
-- During the quarter, the Company negotiated a reduced payoff of one of
its secured notes payable resulting in a pre-tax gain on early
extinguishment of debt of $14.3 million.
Fiscal Year Ended September 30, 2009
-- Loss from continuing operations of $(178.0) million, or $(4.60) per
share, including non-cash pre-tax charges of $97.0 million for inventory
impairments and abandonment of land option contracts, $13.8 million for
impairments in joint ventures and $16.1 million for goodwill
impairments. The results also include a non-cash deferred tax valuation
allowance of $52.8 million and a pre-tax gain on extinguishment of debt
of $144.5 million. For the prior fiscal year, the Company reported a
loss from continuing operations of $(800.8) million, or $(20.77) per
share.
-- Total revenue: $1.01 billion, compared to $1.81 billion in the prior
year.
-- Home closings from continuing operations: 4,330 homes, a decrease
year-over-year of 35.3%.
-- New orders from continuing operations: 4,205 homes, a decrease
year-over-year of 22.2%.
-- Cancellation rate improved to 31.4% in fiscal 2009, compared to 39.6% in
fiscal 2008.
-- Gross profit margin of 2.1% (11.7% without impairments and abandonments)
for the fiscal year, compared to -12.9% (9.5% without impairments and
abandonments) the prior fiscal year.
-- During the fiscal year, the Company repurchased $384.8 million of senior
notes for an aggregate purchase price of $247.7 million or an average
price of 64.4%, resulting in a pre-tax gain on early extinguishment of
debt of $130.2 million.
As of September 30, 2009
-- Total cash and cash equivalents: $556.8 million, including restricted
cash of $49.5 million.
-- Backlog: 1,193 homes with a sales value of $280.8 million compared to
1,318 homes with a sales value of $318.4 million as of September 30,
2008.
Ian J. McCarthy, President and Chief Executive Officer, said, "Following difficult market conditions throughout fiscal 2009, we were pleased to finish the year with a fourth quarter year-over-year increase in net new home orders from continuing operations, improved gross margins and a significant cash balance. During the quarter, we experienced some moderation in negative market trends, with attractive interest rates, historically high housing affordability and the federal tax credit attracting more prospective buyers to purchase a new home. Nonetheless, elevated unemployment and rising foreclosure activity make it difficult to predict when and to what extent the housing market will sustainably recover. In light of the difficult market conditions, we will maintain a disciplined operating approach, focused on gradually improving profitability and protecting our liquidity."
Results for the Quarter Ended September 30, 2009
Homebuilding revenues from continuing operations declined 30.8% in the September quarter, due to a 24.3% decline in home closings and an 8.6% decline in the average selling price of homes closed compared to the same period of the prior year. Net new home orders from continuing operations increased 2.4% compared to the fourth quarter of last year, driven by a 35.5% increase in new orders in the East segment. The cancellation rate for the fourth quarter improved to 34.7%, compared to 46.3% a year ago.
Overall, margins continued to be negatively impacted by weak market conditions, impacting both closing volumes and pricing, and by non-cash pre-tax charges for inventory impairments and lot option abandonments of $29.7 million and $0.2 million, respectively. Compared to the fourth quarter of the prior year, however, gross profit margin improved to 6.6% (14.6% without impairments and abandonments), compared to -0.7% (7.1% without impairments and abandonments) in the fourth quarter of the prior year.
The Company controlled 30,638 lots at September 30, 2009 (83% owned and 17% controlled under options), including 762 owned lots in discontinued operations. This reflects a reduction of 22.7% from the level at September 30, 2008.
As of September 30, 2009, unsold finished homes totaled 270, a decline of approximately 34% from the level a year ago. The Company substantially reduced its land and land development spending in fiscal 2009, which totaled $198.8 million, compared to $333.4 million in fiscal 2008.
Liquidity and Liability Management Initiatives
At September 30 2009, the Company had cash and cash equivalents of $556.8 million, including restricted cash of $49.5 million to collateralize outstanding letters of credit.
As previously reported, on September 11, 2009, the Company issued and sold $250 million aggregate principal amount of 12% Senior Secured Notes due 2017 at an issue price of 89.50%, resulting in net proceeds to the Company of $220 million, which were used to replenish cash that had been used to fund open market repurchases of outstanding senior notes that it had made or agreed to make since April 1, 2009.
During the fourth fiscal quarter, the Company repurchased $269.3 million of outstanding senior notes for an aggregate purchase price of $189.5 million, or an average price of 70.4%, plus accrued and unpaid interest. These repurchases resulted in a pre-tax gain on the extinguishment of debt of approximately $75.0 million. As previously reported, in August 2009, the Company also negotiated a reduced payoff of one of its secured notes payable relating to a joint venture which was previously consolidated by the Company, resulting in a pre-tax gain on early extinguishment of debt of $14.3 million.
The Company also announced its intention to file a Form S-3 Universal Shelf registration statement under which it may offer, from time to time, senior debt securities, subordinated debt securities, common stock, preferred stock, depositary shares, warrants, rights, stock purchase contracts or stock purchase units. However, the Company is not pursuing any particular offering under the registration at this time.
Conference Call
The Company will hold a conference call today, November 10, 2009, at 10:00 am ET to discuss these results and take questions. Interested parties may listen to the conference call and view the Company's slide presentation over the internet by going to the "Investor Relations" section of the Company's website at www.beazer.com. To access the conference call by telephone, listeners should dial 877-601-3546 or 212-547-0388. 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 866-423-4776 or 203-369-0842 and enter the passcode "3740". (available until 5:00 pm ET on November 17, 2009), 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, is one of the country's ten largest single-family homebuilders with continuing operations in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New Mexico, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas, and Virginia. Beazer Homes is listed on the New York Stock Exchange 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 results discussed in the forward-looking statements, including, among other things, (i) the final outcome of various putative class action lawsuits, the derivative claims, 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 other settlement agreements and consent orders with governmental authorities; (ii) additional asset impairment charges or writedowns; (iii) economic changes nationally or in local markets, including changes in consumer confidence, volatility of mortgage interest rates and inflation; (iv) continued or increased downturn in the homebuilding industry; (v) 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, (vi) continued or increased disruption in the availability of mortgage financing; (vii) our cost of and ability to access capital and otherwise meet our ongoing liquidity needs including the impact of any further downgrades of our credit ratings or reductions in our tangible net worth or liquidity levels; (viii) potential inability to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing; (ix) increased competition or delays in reacting to changing consumer preference in home design; (x) shortages of or increased prices for labor, land or raw materials used in housing production; (xi) factors affecting margins such as decreased land values underlying land option agreements, increased land development costs on projects under development or delays or difficulties in implementing initiatives to reduce production and overhead cost structure; (xii) the performance of our joint ventures and our joint venture partners; (xiii) the impact of construction defect and home warranty claims including those related to possible installation of drywall imported from China; (xiv) the cost and availability of insurance and surety bonds; (xv) delays in land development or home construction resulting from adverse weather conditions; (xvi) 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 and governmental policies; (xvii) effects of changes in accounting policies, standards, guidelines or principles; or (xviii) 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.
-Tables Follow-
BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share amounts)
Quarter Ended Fiscal Year Ended
September 30, September 30,
2009 2008 2009 2008
INCOME STATEMENT
Total revenue $ 376,348 $ 649,795 $ 1,005,212 $ 1,813,513
Home construction
and land sales 321,550 603,433 887,407 1,641,270
expenses
Inventory
impairments and 29,887 50,902 96,998 406,168
option contract
abandonments
Gross profit (loss) 24,911 (4,540 ) 20,807 (233,925 )
Selling, general and
administrative 58,272 89,233 228,079 309,320
expenses
Depreciation & 5,802 8,602 18,736 24,708
amortization
Goodwill impairment - - 16,143 48,105
Operating loss (39,163 ) (102,375 ) (242,151 ) (616,058 )
Equity in loss of
unconsolidated joint (112 ) (1,483 ) (13,303 ) (76,552 )
ventures
Gain on early
extinguishment of 89,289 - 144,503 -
debt
Other expense, net (15,881 ) (16,049 ) (75,595 ) (36,505 )
Income (loss) from
continuing 34,133 (119,907 ) (186,546 ) (729,115 )
operations before
income taxes
Income tax (benefit) (1,167 ) 333,928 (8,531 ) 71,655
provision
Income (loss) from
continuing $ 35,300 $ (453,835 ) $ (178,015 ) $ (800,770 )
operations
Loss from
discontinued $ (1,509 ) $ (20,106 ) $ (11,368 ) $ (151,142 )
operations, net of
tax
Net income (loss) $ 33,791 $ (473,941 ) $ (189,383 ) $ (951,912 )
Net income (loss)
per common share
from continuing
operations:
Basic $ 0.91 $ (11.77 ) $ (4.60 ) $ (20.77 )
Diluted $ 0.87 $ (11.77 ) $ (4.60 ) $ (20.77 )
Loss per common
share from
discontinued
operations:
Basic (0.04 ) (0.52 ) $ (0.30 ) $ (3.92 )
Diluted (0.04 ) (0.52 ) $ (0.30 ) $ (3.92 )
Net income (loss)
per common share:
Basic $ 0.87 $ (12.29 ) $ (4.90 ) $ (24.69 )
Diluted $ 0.84 $ (12.29 ) $ (4.90 ) $ (24.69 )
Weighted average
shares outstanding,
in thousands:
Basic 38,753 38,561 38,688 38,549
Diluted 41,865 38,561 38,688 38,549
Interest Data:
Quarter Ended Fiscal Year Ended
September 30, September 30,
2009 2008 2009 2008
Capitalized interest
in inventory, $ 44,386 $ 68,458 $ 45,977 $ 87,560
beginning of period
Interest incurred 30,422 34,445 133,481 139,659
Capitalized interest (1,263 ) (1,327 ) (3,376 ) (13,795 )
impaired
Interest expense not
qualified for
capitalization and (17,044 ) (19,319 ) (83,030 ) (55,185 )
included as other
expense
Capitalized interest
amortized to house
construction (18,163 ) (36,280 ) (54,714 ) (112,262 )
and land sales
expense
Capitalized interest
in inventory, end of $ 38,338 $ 45,977 $ 38,338 $ 45,977
period
BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except per share amounts)
CONSOLIDATED BALANCE SHEETS September 30, September 30,
2009 2008
Assets
Cash and cash equivalents $ 507,339 $ 584,334
Restricted cash 49,461 297
Accounts receivable (net of allowance of $7,545 28,405 46,555
and $8,915, respectively)
Income tax receivable 9,922 173,500
Inventory
Owned inventory 1,265,441 1,545,006
Consolidated inventory not owned 53,015 106,655
Total inventory 1,318,456 1,651,661
Investments in unconsolidated joint ventures 30,124 33,065
Deferred tax assets, net 7,520 20,216
Property, plant and equipment, net 25,939 39,822
Goodwill - 16,143
Other assets 52,244 76,206
Total assets $ 2,029,410 $ 2,641,799
Liabilities and Stockholders' Equity
Trade accounts payable $ 70,285 $ 90,371
Other liabilities 227,315 358,592
Obligations related to consolidated inventory 26,356 70,608
not owned
Senior Notes (net of discounts of $27,257 and 1,362,902 1,522,435
$2,565, respectively)
Junior subordinated notes 103,093 103,093
Other secured notes payable 12,543 50,618
Model home financing obligations 30,361 71,231
Total liabilities 1,832,855 2,266,948
Stockholders' equity:
Preferred stock (par value $.01 per share,
5,000,000 shares - -
authorized, no shares issued)
Common stock (par value $0.001 per share,
80,000,000 shares
authorized, 43,150,472 and 42,612,801 issued 43 43
and
39,793,316 and 39,270,038 outstanding,
respectively)
Paid-in capital 568,019 556,910
Retained earnings (accumulated deficit) (187,538 ) 1,845
Treasury stock, at cost (3,357,156 and (183,969 ) (183,947 )
3,342,763 shares, respectively)
Total stockholders' equity 196,555 374,851
Total liabilities and stockholders' equity $ 2,029,410 $ 2,641,799
Inventory Breakdown
Homes under construction $ 219,724 $ 338,971
Development projects in progress 487,457 572,275
Land held for future development 417,834 407,320
Land held for sale 42,470 85,736
Capitalized interest 38,338 45,977
Model homes 59,618 94,727
Consolidated inventory not owned 53,015 106,655
$ 1,318,456 $ 1,651,661
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA - CONTINUING OPERATIONS
(Dollars in thousands)
OPERATING DATA
Quarter Ended Fiscal Year Ended
September 30, September 30,
SELECTED OPERATING DATA 2009 2008 2009 2008
Closings:
West region 740 1,038 1,916 2,777
East region 660 733 1,573 2,405
Southeast region 285 455 841 1,515
Total closings 1,685 2,226 4,330 6,697
New orders, net of cancellations:
West region 400 440 1,834 2,499
East region 431 318 1,669 1,573
Southeast region 181 230 702 1,331
Total new orders 1,012 988 4,205 5,403
Backlog units at end of period:
West region 445 527
East region 581 485
Southeast region 167 306
Total backlog units 1,193 1,318
Dollar value of backlog at end of $ 280,766 $ 318,447
period
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA - CONTINUING OPERATIONS
(Dollars in thousands)
Quarter Ended Fiscal Year Ended
September 30, September 30,
SUPPLEMENTAL 2009 2008 2009 2008
FINANCIAL DATA
Revenues
Homebuilding $ 373,672 $ 539,837 $ 1,000,010 $ 1,693,583
operations
Land and lot sales 2,020 108,704 3,389 115,737
Financial Services 656 1,254 1,813 4,193
Total revenues $ 376,348 $ 649,795 $ 1,005,212 $ 1,813,513
Gross profit (loss)
Homebuilding $ 23,691 (12,071 ) $ 18,374 (247,688 )
operations
Land and lot sales 564 6,277 620 9,570
Financial Services 656 1,254 1,813 4,193
Total gross (loss) $ 24,911 $ (4,540 ) $ 20,807 $ (233,925 )
profit
Selling, general and
administrative
Homebuilding $ 58,086 $ 88,656 $ 226,973 $ 306,837
operations
Financial Services 186 577 1,106 2,483
Total selling,
general and $ 58,272 $ 89,233 $ 228,079 $ 309,320
administrative
SELECTED SEGMENT
INFORMATION
Revenue:
West region $ 151,599 $ 236,734 $ 416,027 $ 674,103
East region 166,083 307,873 406,112 780,380
Southeast region 58,010 103,934 181,260 354,837
Financial services 656 1,254 1,813 4,193
Total revenue $ 376,348 $ 649,795 $ 1,005,212 $ 1,813,513
Operating income
(loss)
West region $ 1,128 $ (439 ) $ (32,019 ) $ (140,989 )
East region 8,666 (887 ) (6,094 ) (63,913 )
Southeast region (9,479 ) (21,054 ) (30,025 ) (109,675 )
Financial services 469 669 697 1,681
Segment operating 784 (21,711 ) (67,441 ) (312,896 )
income (loss)
Corporate and (39,947 ) (80,664 ) (174,710 ) (303,162 )
unallocated
Total operating loss $ (39,163 ) $ (102,375 ) $ (242,151 ) $ (616,058 )
Source: Beazer Homes USA, Inc.
Related Categories
Press ReleasesStocks Mentioned
-0.17Related Entities
Sign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
