Attached files
| file | filename |
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| 8-K - 8-K COVER - BEAZER HOMES USA INC | a8kcover-10kpressrelease.htm |
| EX-99.2 - CONFERENCE CALL TRANSCRIPT - BEAZER HOMES USA INC | exhibit992conferencecalltr.htm |
Exhibit 99.1
PRESS RELEASE
Beazer Homes Reports Fourth Quarter and Full Year Fiscal 2012 Results
ATLANTA, November 12, 2012 - 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.
Also, while we believe we possess sufficient liquidity to participate in a housing recovery, we are mindful of potential short-term, or seasonal, requirements for enhanced liquidity that may arise. Therefore, during September, we entered into a $150 million, three-year amended and restated senior revolving credit facility, further strengthening our available liquidity.
Finally, subsequent to September 30, 2012, we announced the effectiveness of a 1-for-5 reverse split of our common stock. Shares of Beazer Homes' common stock began trading on a split-adjusted basis on October 12, 2012.
Conference Call
The Company will hold a conference call on November 12, 2012 at 11:00 am ET to discuss these results. Interested parties may listen to the conference call and view the Company's slide presentation over the Internet by visiting the “Investor Relations” section of the Company's website at www.beazer.com. To access the conference call by telephone, listeners should dial 800-619-8639 (for international callers, dial 312-470-7002). 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 866-495-9351 or 203-369-1779 and enter the passcode “3740” (available until 11:00 pm ET on November 19, 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 Company's 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.”
For more information, please visit Beazer.com or check out Beazer on Facebook and Twitter.
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) economic changes nationally or in local markets, including changes in consumer confidence, declines in employment levels, inflation and increases in the quantity and decrease in the price of new homes and resale homes in the market; (ii) a slower economic rebound than anticipated, coupled with persistently high unemployment and additional foreclosures; (iii) 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; (iv) a substantial increase in mortgage interest rates, increased disruption in the availability of mortgage financing or a change in tax laws regarding the deductibility of mortgage interest; (v) 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; (vi) 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; (vii) 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; (viii) our ability to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing; (ix) estimates related to the potential recoverability of our deferred tax assets; (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) additional asset impairment charges or writedowns; (xiii) the impact of construction defect and home warranty claims; (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 and possible penalties for failure to comply with laws, regulations and governmental policies; (xvii) the performance of our joint ventures and our joint venture partners; (xviii) potential exposure related to additional repurchase claims on mortgages and loans originated by Beazer Mortgage Corp.; (xix) effects of changes in accounting policies, standards, guidelines or principles; or (xx) 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-
BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands, except per share data)
Three Months Ended | Fiscal Year Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Total revenue | $ | 370,931 | $ | 334,908 | $ | 1,005,677 | $ | 742,405 | |||||||
Home construction and land sales expenses | 327,815 | 303,438 | 888,379 | 661,851 | |||||||||||
Inventory impairments and option contract abandonments | 1,718 | 7,128 | 12,210 | 32,459 | |||||||||||
Gross profit | 41,398 | 24,342 | 105,088 | 48,095 | |||||||||||
Commissions | 16,063 | 14,645 | 43,585 | 32,711 | |||||||||||
General and administrative expenses | 27,671 | 30,234 | 110,051 | 137,376 | |||||||||||
Depreciation and amortization | 4,174 | 3,626 | 13,510 | 10,253 | |||||||||||
Operating loss | (6,510 | ) | (24,163 | ) | (62,058 | ) | (132,245 | ) | |||||||
Equity in income (loss) of unconsolidated entities | 329 | 188 | 304 | 560 | |||||||||||
Loss on extinguishment of debt | (42,350 | ) | — | (45,097 | ) | (2,909 | ) | ||||||||
Other expense, net | (15,777 | ) | (15,608 | ) | (69,119 | ) | (62,224 | ) | |||||||
Loss from continuing operations before income taxes | (64,308 | ) | (39,583 | ) | (175,970 | ) | (196,818 | ) | |||||||
(Benefit from) provision for income taxes | (3,909 | ) | 2,796 | (40,347 | ) | 3,366 | |||||||||
Loss from continuing operations | (60,399 | ) | (42,379 | ) | (135,623 | ) | (200,184 | ) | |||||||
Loss from discontinued operations, net of tax | (5,834 | ) | (797 | ) | (9,703 | ) | (4,675 | ) | |||||||
Net loss | $ | (66,233 | ) | $ | (43,176 | ) | $ | (145,326 | ) | $ | (204,859 | ) | |||
Weighted average number of shares: | |||||||||||||||
Basic and Diluted | 23,528 | 14,830 | 18,474 | 14,797 | |||||||||||
Basic and diluted loss per share: | |||||||||||||||
Continuing Operations | $ | (2.57 | ) | $ | (2.86 | ) | $ | (7.34 | ) | $ | (13.53 | ) | |||
Discontinued operations | $ | (0.25 | ) | $ | (0.05 | ) | $ | (0.53 | ) | $ | (0.31 | ) | |||
Total | $ | (2.82 | ) | $ | (2.91 | ) | $ | (7.87 | ) | $ | (13.84 | ) | |||
Three Months Ended | Fiscal Year Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||
Capitalized interest in inventory, beginning of period | $ | 45,373 | $ | 51,230 | $ | 45,973 | $ | 36,884 | |||||||
Interest incurred | 28,968 | 32,643 | 124,918 | 130,818 | |||||||||||
Capitalized interest impaired | — | (118 | ) | (275 | ) | (1,907 | ) | ||||||||
Interest expense not qualified for capitalization and included as other expense | (16,327 | ) | (17,752 | ) | (71,474 | ) | (73,440 | ) | |||||||
Capitalized interest amortized to house construction and land sales expenses | (19,824 | ) | (20,030 | ) | (60,952 | ) | (46,382 | ) | |||||||
Capitalized interest in inventory, end of period | $ | 38,190 | $ | 45,973 | $ | 38,190 | $ | 45,973 | |||||||
BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands, except share and per share data)
September 30, 2012 | September 30, 2011 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 487,795 | $ | 370,403 | ||||
Restricted cash | 253,260 | 277,058 | ||||||
Accounts receivable (net of allowance of $2,235 and $3,872, respectively) | 24,599 | 28,303 | ||||||
Income tax receivable | 6,372 | 4,823 | ||||||
Inventory | ||||||||
Owned inventory | 1,099,132 | 1,192,380 | ||||||
Land not owned under option agreements | 12,420 | 11,753 | ||||||
Total inventory | 1,111,552 | 1,204,133 | ||||||
Investments in unconsolidated entities | 42,078 | 9,467 | ||||||
Deferred tax assets, net | 6,848 | 2,760 | ||||||
Property, plant and equipment, net | 18,974 | 22,613 | ||||||
Previously owned rental homes, net | — | 11,347 | ||||||
Other assets | 30,740 | 46,570 | ||||||
Total assets | $ | 1,982,218 | $ | 1,977,477 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Trade accounts payable | $ | 69,268 | $ | 72,695 | ||||
Other liabilities | 147,718 | 212,187 | ||||||
Obligations related to land not owned under option agreements | 4,787 | 5,389 | ||||||
Total debt (net of discounts of $3,082 and $23,243, respectively) | 1,498,198 | 1,488,826 | ||||||
Total liabilities | $ | 1,719,971 | $ | 1,779,097 | ||||
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, 100,000,000 shares authorized, 24,601,830 and 15,117,679 issued and outstanding, respectively) | 25 | 15 | ||||||
Paid-in capital | 833,994 | 624,811 | ||||||
Accumulated deficit | (571,772 | ) | (426,446 | ) | ||||
Total stockholders’ equity | 262,247 | 198,380 | ||||||
Total liabilities and stockholders’ equity | $ | 1,982,218 | $ | 1,977,477 | ||||
Inventory Breakdown | ||||||||
Homes under construction | $ | 251,828 | $ | 277,331 | ||||
Development projects in progress | 391,019 | 424,055 | ||||||
Land held for future development | 367,102 | 384,761 | ||||||
Land held for sale | 10,149 | 12,837 | ||||||
Capitalized interest | 38,190 | 45,973 | ||||||
Model homes | 40,844 | 47,423 | ||||||
Land not owned under option agreements | 12,420 | 11,753 | ||||||
Total inventory | $ | 1,111,552 | $ | 1,204,133 | ||||
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
Quarter Ended September 30, | Fiscal Year Ended September 30, | |||||||||||||||
SELECTED OPERATING DATA | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Closings: | ||||||||||||||||
West region | 689 | 445 | 1,883 | 1,115 | ||||||||||||
East region | 522 | 584 | 1,506 | 1,316 | ||||||||||||
Southeast region | 397 | 347 | 1,039 | 818 | ||||||||||||
Continuing Operations | 1,608 | 1,376 | 4,428 | 3,249 | ||||||||||||
Discontinued Operations | — | 28 | 19 | 101 | ||||||||||||
Total closings | 1,608 | 1,404 | 4,447 | 3,350 | ||||||||||||
New orders, net of cancellations: | ||||||||||||||||
West region | 464 | 378 | 2,152 | 1,416 | ||||||||||||
East region | 378 | 385 | 1,615 | 1,588 | ||||||||||||
Southeast region | 268 | 243 | 1,134 | 923 | ||||||||||||
Continuing Operations | 1,110 | 1,006 | 4,901 | 3,927 | ||||||||||||
Discontinued Operations | — | 17 | 2 | 94 | ||||||||||||
Total new orders | 1,110 | 1,023 | 4,903 | 4,021 | ||||||||||||
Backlog units at end of period: | ||||||||||||||||
West region | 839 | 570 | 839 | 570 | ||||||||||||
East region | 747 | 638 | 747 | 638 | ||||||||||||
Southeast region | 337 | 242 | 337 | 242 | ||||||||||||
Continuing Operations | 1,923 | 1,450 | 1,923 | 1,450 | ||||||||||||
Discontinued Operations | — | 17 | — | 17 | ||||||||||||
Total backlog units | 1,923 | 1,467 | 1,923 | 1,467 | ||||||||||||
Dollar value of backlog at end of period (in millions) | $ | 479.1 | $ | 338.3 | $ | 479.1 | $ | 338.3 | ||||||||
Homebuilding Revenue (in thousands): | ||||||||||||||||
West region | $ | 141,124 | $ | 89,548 | $ | 386,544 | $ | 218,433 | ||||||||
East region | 146,295 | 157,299 | 401,814 | 339,666 | ||||||||||||
Southeast region | 80,100 | 66,988 | 207,701 | 154,623 | ||||||||||||
Total homebuilding revenue | $ | 367,519 | $ | 313,835 | $ | 996,059 | $ | 712,722 | ||||||||
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
(Dollars in thousands)
Quarter Ended September 30, | Fiscal Year Ended September 30, | |||||||||||||||
SUPPLEMENTAL FINANCIAL DATA | 2012 | 2011 | 2012 | 2011 | ||||||||||||
Revenues: | ||||||||||||||||
Homebuilding | $ | 367,519 | $ | 313,835 | $ | 996,059 | $ | 712,722 | ||||||||
Land sales and other | 3,412 | 21,073 | 9,618 | 29,683 | ||||||||||||
Total | $ | 370,931 | $ | 334,908 | $ | 1,005,677 | $ | 742,405 | ||||||||
Gross profit: | ||||||||||||||||
Homebuilding | $ | 41,630 | $ | 23,869 | $ | 103,105 | $ | 43,996 | ||||||||
Land sales and other | (232 | ) | 473 | 1,983 | 4,099 | |||||||||||
Total | $ | 41,398 | $ | 24,342 | $ | 105,088 | $ | 48,095 | ||||||||
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 September 30, | Fiscal Year Ended September 30, | ||||||||||||||||||||||
2012 | 2011 | 2012 | 2011 | ||||||||||||||||||||
Homebuilding gross profit | $ | 41,630 | 11.3 | % | $ | 23,869 | 7.6 | % | $ | 103,105 | 10.4 | % | $ | 43,996 | 6.2 | % | |||||||
Inventory impairments and lot option abandonments (I&A) | 1,718 | 7,128 | 12,210 | 32,459 | |||||||||||||||||||
Homebuilding gross profit before I&A | 43,348 | 11.8 | % | 30,997 | 9.9 | % | 115,315 | 11.6 | % | 76,455 | 10.7 | % | |||||||||||
Interest amortized to cost of sales | 19,824 | 20,030 | 60,952 | 46,382 | |||||||||||||||||||
Homebuilding gross profit before I&A and interest amortized to cost of sales | $ | 63,172 | 17.2 | % | $ | 51,027 | 16.3 | % | $ | 176,267 | 17.7 | % | $ | 122,837 | 17.2 | % | |||||||
Reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, loss on debt extinguishment 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 September 30, | Fiscal Year Ended September 30, | |||||||||||||||
2012 | 2011 | 2012 | 2011 | |||||||||||||
Net loss | $ | (66,233 | ) | $ | (43,176 | ) | $ | (145,326 | ) | $ | (204,859 | ) | ||||
(Benefit) provision from Income Taxes | (3,901 | ) | 2,850 | (40,747 | ) | 3,429 | ||||||||||
Interest amortized to home construction and land sales expenses, capitalized interest impaired, and interest expense not qualified for capitalization | 36,151 | 37,900 | 132,701 | 121,729 | ||||||||||||
Depreciation and amortization and stock compensation amortization | 4,991 | 4,246 | 17,573 | 17,878 | ||||||||||||
Inventory impairments and option contract abandonments | 1,718 | 7,102 | 12,514 | 33,458 | ||||||||||||
Loss on debt extinguishment | 42,350 | — | 45,097 | 2,909 | ||||||||||||
Joint venture impairment and abandonment charges | — | 7 | 36 | 594 | ||||||||||||
Adjusted EBITDA | $ | 15,076 | $ | 8,929 | $ | 21,848 | $ | (24,862 | ) | |||||||