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Beazer Homes Closes Out Fiscal 2013 With $11.9 Million Of Net Income For The Fourth Quarter And 21.4% Homebuilding Gross Margins

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

The Company closed out its fiscal year with improved fourth quarter results highlighted by positive net income of $11.9 million and 21.4% homebuilding gross margins. Adjusted EBITDA was $41.5 million for the quarter, up from $15.1 million in the fourth quarter of fiscal 2012.

For the full year fiscal 2013, the Company made significant progress on its objective to return to sustainable profitability. The Company’s net loss for fiscal 2013 was $33.9 million, compared to a loss of $145.3 million for fiscal 2012. New home orders were up 2.6% despite an 18.5% reduction in average community count, while full year homebuilding gross margins increased to 20.0%. And, adjusted EBITDA for the full year was significantly improved at $86.3 million for fiscal 2013, up from $21.8 million last year.

“We finished 2013 with solidly improved operating and financial results,” said Allan Merrill, CEO of Beazer Homes. “In the fourth quarter, we reported our first net profit from operations in many years, realizing the benefits of our path-to-profitability strategies and the impact of an improved homebuilding market. For the full year, with continued improvements in average sales price, sales per community per month and homebuilding gross margins, we achieved adjusted EBITDA that was more than triple the amount reported for fiscal 2012.

“With this positive momentum heading into fiscal 2014 as well as our continued belief that new home affordability and inventory levels will remain favorable, we expect to report a full year of profitability for fiscal 2014.”

Q4 Results from Continuing Operations (unless otherwise specified)

  Quarter Ended September 30,
2013   2012   Change
New Home Orders 1,192 1,110 7.4 %
Average community count 135 163 (17.2 )%
QTD orders per month per community 3.0 2.3 30.4 %
Cancellation rates 23.9 % 31.1 % -720 bps
 
Total Home Closings 1,657 1,608 3.0 %
Average sales price from closings (in thousands) $ 263.2 $ 228.6 15.1 %
Homebuilding revenue (in millions) $ 436.2 $ 367.5 18.7 %
Homebuilding gross profit margin, excluding impairments and abandonments (I&A) 18.3 % 11.8 % 650 bps
Homebuilding gross profit margin, excluding I&A and interest amortized to cost of sales 21.4 % 17.2 % 420 bps
 
Income (loss) from continuing operations before income taxes (in millions) $ 8.9 $ (64.3 ) $ 73.2
Benefit from income taxes (in millions) $ 2.5 $ 3.9 $ (1.4 )
Net income (loss) from continuing operations (in millions) $ 11.3 $ (60.4 ) $ 71.7
Basic Income (Loss) Per Share $ 0.46 $ (2.57 ) $ 3.03
Diluted Income (Loss) Per Share $ 0.36 $ (2.57 ) $ 2.93
Loss on debt extinguishment (in millions) $ (1.0 ) $ (42.4 ) $ 41.4
Inventory impairments (in millions) $ (0.4 ) $ (1.7 ) $ 1.3
Net income (loss) from continuing operations excluding loss on debt extinguishment and inventory impairments (in millions) $ 12.7 $ (16.3 ) $ 29.0
Land and land development spending (in millions) $ 160.8 $ 45.0 $ 115.8
Total Company Adjusted EBITDA (in millions) $ 41.5 $ 15.1 $ 26.4
 

Full Year Results from Continuing Operations (unless otherwise specified)

  Year Ended September 30,
2013   2012   Change
New Home Orders 5,026 4,901 2.6 %
Average community count 145 178 (18.5 )%
LTM orders per month per community 2.9 2.3 26.1 %
Cancellation rates 21.8 % 27.2 % -540 bps
 
Total Home Closings 5,056 4,428 14.2 %
Average sales price from closings (in thousands) $ 253.0 $ 224.9 12.5 %
Homebuilding revenue (in millions) $ 1,279.2 $ 996.1 28.4 %
Homebuilding gross profit margin, excluding impairments and abandonments 16.8 % 11.6 % 520 bps
Homebuilding gross profit margin, excluding impairments, abandonments and interest amortized to cost of sales 20.0 % 17.7 % 230 bps
 
Loss from continuing operations before income taxes (in millions) $ (35.7 ) $ (176.0 ) $ 140.3
Benefit from income taxes (in millions) $ 3.5 $ 40.3 $ (36.8 )
Net loss from continuing operations (in millions) $ (32.2 ) $ (135.6 ) $ 103.4
Basic and Diluted Loss Per Share $ (1.30 ) $ (7.34 ) $ 6.04
Loss on debt extinguishment (in millions) $ (4.6 ) $ (45.1 ) $ 40.5
Inventory impairments (in millions) $ (2.6 ) $ (12.2 ) $ 9.6
Net loss from continuing operations excluding loss on debt extinguishment and inventory impairments (in millions) $ (25.0 ) $ (78.3 ) $ 53.3
Land and land development spending (in millions) $ 475.2 $ 185.5 $ 289.7
Adjusted EBITDA (in millions) $ 86.3 $ 21.8 $ 64.5
 

As of September 30, 2013

  • Total cash and cash equivalents: $553.4 million, including unrestricted cash of approximately $504.5 million
  • Stockholders' equity: $240.6 million
  • Total backlog from continuing operations: 1,893 homes with a sales value of $528.1 million, compared to 1,923 homes with a sales value of $479.1 million as of September 30, 2012
  • Land and lots controlled: 28,004 lots (79.4% owned), an increase of 16.0% from September 30, 2012

Capital Markets Activity

During the year ended September 30, 2013, we engaged in several capital raising transactions designed to further strengthen our balance sheet and provide additional capital for land acquisitions and development. In February 2013, we issued and sold $200 million aggregate principal amount of 7.25% Senior Notes due 2023 through a private placement to qualified institutional buyers. A portion of these proceeds were used to fund the redemption of all of our outstanding 6.875% Senior Notes due 2015 and to repurchase $2 million of our 9.125% Senior Notes due 2018. In September 2013, we issued and sold $200 million aggregate principal amount of 7.5% Senior Notes due 2021 through a private placement to qualified institutional buyers. Proceeds from the 2021 Notes and the remaining funds from the 2023 Notes have been or will be used to expand our new home community count in targeted markets and for general corporate purposes.

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