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Beazer Homes Reports Improved Third Quarter Results Highlighted By Higher Margins And Faster Sales Pace

Stocks in this article: BZH

Beazer Homes USA, Inc. (NYSE: BZH) ( www.beazer.com) today announced its financial results for the quarter and nine months ended June 30, 2013.

The Company's third quarter results included notable progress on its Path-to-Profitability strategies, including increased margins and higher sales per active community. Adjusted EBITDA was $21.8 million for the quarter, up from $4.0 million in the third quarter of Fiscal 2012. Year-to-date orders were up slightly over last year, while orders for the third quarter were down year-over-year due to an expected decline in community count. With an aggressive land acquisition strategy underway, the Company expects a materially higher community count by the end of Fiscal 2014.

“We were pleased with the continued improvement in both our key operational metrics and our financial results for the third quarter,” said Allan Merrill, CEO of Beazer Homes. “With improved homebuilding gross margins, higher average sales prices and strict control over operating expenses, we are poised to report positive net income in our fiscal fourth quarter and expect to report our first full year of profitability in nearly a decade for fiscal 2014.”

Summary results for the quarter and nine months ended June 30, 2013 are as follows (per share amounts are calculated after giving effect to a 1-for-5 reverse stock split completed on October 11, 2012, as applicable):

Q3 Results from Continuing Operations (unless otherwise specified)

  Quarter Ended June 30,
2013     2012     Change
New Home Orders 1,381 1,555 (11.2 )%
LTM orders per month per community 2.7 2.2 22.7 %
Cancellation rates 20.0 % 24.5 % -450 bps
 
Total Home Closings 1,234 1,109 11.3 %
Average sales price from closings (in thousands) $ 253.8 $ 227.3 11.7 %
Homebuilding revenue (in millions) $ 313.1 $ 252.1 24.2 %
Homebuilding gross profit margin, excluding impairments and abandonments (I&A) 17.1 % 10.5 % 660 bps
Homebuilding gross profit margin, excluding I&A and interest amortized to cost of sales 20.3 % 16.7 % 360 bps
 
Loss from continuing operations before income taxes (in millions) $ (5.9 ) $ (37.9 ) $ 32.0
Benefit from (provision for) income taxes (in millions) $ 0.4 $ (0.1 ) $ 0.5
Net loss from continuing operations (in millions) $ (5.4 ) $ (38.0 ) $ 32.6
Basic Loss Per Share $ (0.22 ) $ (1.92 ) $ 1.70
Inventory impairments (in millions) $ $ (5.8 ) $ 5.8
Net loss from continuing operations excluding inventory impairments (in millions) $ (5.4 ) $ (32.2 ) $ 26.8
Land and land development spending (in millions) $ 161.8 $ 40.5 $ 121.3
Total Company Adjusted EBITDA (in millions) $ 21.8 $ 4.0 $ 17.8
 
 

Nine Month Results from Continuing Operations (unless otherwise specified)

  Nine Months Ended June 30,
2013     2012     Change
New Home Orders 3,834 3,791 1.1 %
LTM orders per month per community 2.7 2.2 22.7 %
Cancellation rates 21.1 % 26.0 % -490 bps
 
Total Home Closings 3,399 2,820 20.5 %
Average sales price from closings (in thousands) $ 248.0 $ 222.9 11.3 %
Homebuilding revenue (in millions) $ 843.0 $ 628.5 34.1 %
Homebuilding gross profit margin, excluding impairments and abandonments (I&A) (a) 16.0 % 11.4 % 460 bps
Homebuilding gross profit margin, excluding I&A and interest amortized to cost of sales (a) 19.3 % 18.0 % 130 bps
 
Loss from continuing operations before income taxes (in millions) $ (44.5 ) $ (111.7 ) $ 67.2
Benefit from income taxes (in millions) $ 1.0 $ 36.4 $ (35.4 )
Net loss from continuing operations (in millions) $ (43.5 ) $ (75.3 ) $ 31.8
Basic Loss Per Share $ (1.77 ) $ (4.48 ) $ 2.71
Loss on debt extinguishment (in millions) $ (3.6 ) $ (2.7 ) $ (0.9 )
Inventory impairments (in millions) $ (2.2 ) $ (10.5 ) $ 8.3
Net loss from continuing operations excluding inventory impairments and loss on debt extinguishment (in millions) $ (37.7 ) $ (62.1 ) $ 24.4
Land and land development spending (in millions) $ 314.4 $ 140.6 $ 173.8
Total Company Adjusted EBITDA (in millions) $ 44.7 $ 6.8 $ 37.9
 
 

(a) This homebuilding gross profit for the nine months ended June 30, 2012 includes an $11.0 million warranty recovery which contributed 180 bps to this margin.

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