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Beazer Homes Reports Fourth Quarter And Full Year Fiscal 2012 Results

Beazer Homes USA, Inc. (NYSE: BZH) ( www.beazer.com) today announced its financial results for the quarter and fiscal year ended September 30, 2012.

“I'm pleased with the significant progress we made in 2012 strengthening both our business and our balance sheet,” said Allan Merrill, President and Chief Executive Officer of Beazer Homes. “Operationally, we generated significant growth in orders, closings and backlog, while seeing improving trends in gross margins. From a balance sheet perspective, we added liquidity, improved our book value, extended debt maturities and reduced interest expense."

"In 2013, we expect to meaningfully improve our EBITDA, primarily by achieving margin expansion and further improvement in our sales per community metrics. While our community count will likely decrease for much of the year, we are actively investing in a substantial number of new communities, which we expect to deliver closings starting in fiscal year 2014.”

Summary results of the fiscal year and quarter are as follows (all per share amounts are calculated after giving effect to a 1-for-5 reverse stock split completed subsequent to September 30, 2012):

Full Year Results from Continuing Operations (unless otherwise specified)

  Year Ended September 30,
2012   2011   Change
New Home Orders 4,901 3,927 24.8 %
Average community count 178 179 (0.6 )%
Orders per month per community 2.3 1.8 27.8 %
Cancellation rates 27.2 % 27.0 %

20

 bps

 
Total Home Closings 4,428 3,249 36.3 %
Average sales price from closings (in thousands) $ 224.9 $ 219.4 2.5 %
Homebuilding revenue (in millions) $ 996.1 $ 712.7 39.8 %
Homebuilding gross profit margin, excluding impairments and
abandonments 11.6 % 10.7 % 90 bps
Homebuilding gross profit margin, excluding impairments,
abandonments and interest amortized to cost of sales 17.7 % 17.2 % 50 bps
 
Net loss from continuing operations (in millions) $ (135.6 ) $ (200.2 ) $ 64.6
Per Share $ (7.34 ) $ (13.53 ) $ 6.19
Loss on debt extinguishment (in millions) $ (45.1 ) $ (2.9 ) $ (42.2 )
Inventory impairments (in millions) $ (12.2 ) $ (32.5 ) $ 20.3
Net (loss) income from continuing operations excluding loss on debt
extinguishment and inventory impairments (in millions) $ (78.3 ) $ (164.8 ) $ 86.5
Land and land development spending (in millions) $ 185.5 $ 221.6 $ (36.1 )
Adjusted EBITDA (in millions) $ 21.8 $ (24.9 ) $ 46.7
 
 

Q4 Results from Continuing Operations (unless otherwise specified)

  Quarter Ended September 30,
2012   2011   Change
New Home Orders 1,110 1,006 10.3 %
Average community count 163 184 (11.4 )%
Orders per month per community 2.3 1.8 27.8 %
Cancellation rates 31.1 % 34.2 %

-310

 bps

 
Total Home Closings 1,608 1,376 16.9 %
Average sales price from closings (in thousands) $ 228.6 $ 228.1 0.2 %
Homebuilding revenue (in millions) $ 367.5 $ 313.8 17.1 %
Homebuilding gross profit margin, excluding impairments and
abandonments 11.8 % 9.9 % 190 bps
Homebuilding gross profit margin, excluding impairments,
abandonments and interest amortized to cost of sales 17.2 % 16.3 % 90 bps
 
Net loss from continuing operations (in millions) $ (60.4 ) $ (42.4 ) $ (18.0 )
Per Share $ (2.57 ) $ (2.86 ) $ 0.29
Loss on debt extinguishment (in millions) $ (42.4 ) $ $ (42.4 )
Inventory impairments (in millions) $ (1.7 ) $ (7.1 ) $ 5.4
Net (loss) income from continuing operations excluding loss on debt
extinguishment and inventory impairments (in millions) $ (16.3 ) $ (35.3 ) $ 19.0
Land and land development spending (in millions) $ 45.0 $ 43.6 $ 1.4
Adjusted EBITDA (in millions) $ 15.1 $ 8.9 $ 6.2
 
 

As of September 30, 2012

  • Total cash and cash equivalents: $741.1 million, including unrestricted cash of approximately $487.8 million
  • Stockholders' equity: $262.2 million, not including $9.4 million of mandatory convertible subordinated notes, which automatically convert to common stock at maturity in 2013
  • Total backlog from continuing operations: 1,923 homes with a sales value of $479.1 million, compared to 1,450 homes with a sales value of $334.5 million as of September 30, 2011
  • Land and lots controlled: 24,147 lots (82.6% owned), a decrease of 9.5% from September 30, 2011

Capital Markets Activity

During the quarter ended September 30, 2012, we engaged in several capital raising transactions designed to further strengthen our balance sheet and position us to better participate in the emerging housing recovery. During July, we completed underwritten public offerings of 4.4 million (split-adjusted) shares of Beazer common stock at $14.50 per share, totaling $63.8 million, 4.6 million 7.50% tangible equity units, totaling $115.0 million, and a private placement of $300 million of 6.625% senior secured notes due 2018, generating approximately $466 million of proceeds, net of the offering fees and expenses. A portion of these proceeds were used to fund the redemption of our $250 million 12% senior secured notes due 2017 and to repurchase $15 million of our 9 1/8% senior unsecured notes due 2019. The remaining funds will be used to expand our new home community count in targeted markets and for general corporate purposes. The capital market transactions completed in fiscal 2012 are expected to reduce the Company's annual interest expense obligation by approximately $15 million.

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