EX-99.2 4 a2083429zex-99_2.htm EXHIBIT 99.2
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Exhibit 99.2

Crossmann Communities, Inc.
and Subsidiaries

Consolidated Balance Sheet
($ in thousands)

 
  March 31, 2002
 
  (unaudited)

Assets      
  Cash and cash equivalents   $ 7,948
  Retainages     1,807
  Real estate inventories     330,889
  Furniture and equipment, net     10,185
  Investments in joint ventures     19,550
  Goodwill, net     18,814
  Other assets     34,208
   
Total assets   $ 423,401
   

Liabilities and shareholders' equity

 

 

 
  Accounts payable   $ 14,180
  Accrued expenses and other liabilities     17,275
  Notes payable     117,933
   
Total liabilities     149,388

Commitments and contingencies

 

 

 

Shareholders' equity:

 

 

 
  Common shares     55,770
  Retained earnings     218,243
   
Total shareholders' equity     274,013
   
Total liabilities and shareholders' equity   $ 423,401
   

See accompanying notes.



Crossmann Communities, Inc.
and Subsidiaries

Consolidated Statements of Income (unaudited)
(in thousands, except share data)

 
  Three Months Ended March 31,
 
 
  2002
  2001
 
Sales of residential real estate   $ 141,556   $ 109,770  
Cost of residential real estate sold     111,220     86,784  
Gross profit     30,336     22,986  

Selling, general and administrative

 

 

20,725

 

 

16,588

 
Income from operations     9,611     6,398  

Other income, net

 

 

485

 

 

1,064

 
Interest expense     (919 )   (500 )
      (434 )   564  

Income before income taxes

 

 

9,177

 

 

6,962

 
Income taxes     3,671     2,659  
   
 
 
Net income   $ 5,506   $ 4,303  
   
 
 

Weighted average number of common shares outstanding:

 

 

 

 

 

 

 
  Basic     10,769     10,463  
  Diluted     10,830     10,655  
   
 
 
Net income per common share:              
  Basic   $ .51   $ .41  
  Diluted   $ .51   $ .40  
   
 
 

See accompanying notes.



Crossmann Communities, Inc.
and Subsidiaries

Consolidated Statements of Cash Flows (unaudited)
(in thousands)

 
  Three Months
Ended March 31,
2002

  Three Months
Ended March 31,
2001

 
Operating activities:              
Net income   $ 5,506   $ 4,303  
Adjustments to reconcile net income to net cash flows from operating activities:              
  Depreciation     525     298  
  Amortization     13     271  
  Cash provided (used) by changes in:              
    Retainages     (667 )   (987 )
    Real estate inventories     8,444     (22,480 )
    Other assets     (3,880 )   4,546  
    Accounts payable     (14,431 )   1,680  
    Accrued expenses and other liabilities     (992 )   337  
   
 
 
Net cash used by operating activities     (5,482 )   (12,032 )

Investing activities:

 

 

 

 

 

 

 
Purchases of furniture and equipment     (211 )   (268 )
Investments in joint ventures     (4,238 )   (2,858 )
   
 
 
Net cash used by investing activities     (4,449 )   (3,126 )

Financing activities:

 

 

 

 

 

 

 
Proceeds from bank borrowings     25,275     53,265  
Principal payments on bank borrowings     (25,675 )   (52,135 )
Net proceeds from sale of common shares     4,100     55  
   
 
 
Net cash provided by financing activities     3,700     1,185  

Net decrease in cash and cash equivalents

 

 

(6,231

)

 

(13,973

)
Cash and cash equivalents at beginning of period     14,179     17,443  
   
 
 
Cash and cash equivalents at end of period   $ 7,948   $ 3,470  
   
 
 

See accompanying notes.



CROSSMANN COMMUNITIES, INC. AND SUBSIDIARIES

Notes to Unaudited Consolidated Financial Statements

1)    Basis of Presentation

        Crossmann Communities, Inc. ("Crossmann" or the "Company") is engaged primarily in the development, construction, marketing and sale of new single-family homes for first-time and first move-up buyers. The Company also acquires and develops land for construction of such homes and originates mortgage loans for the buyers. The Company operates in Indianapolis, Ft. Wayne, Lafayette, Indiana; Cincinnati, Columbus and Dayton, Ohio; Lexington, Kentucky; Memphis, Tennessee; Charlotte and Raleigh, North Carolina; and in Myrtle Beach, South Carolina.

        The accompanying unaudited consolidated financial statements have been prepared in accordance with the instructions for Articles 3.05 and 10 of Regulation S-X. Accordingly, the unaudited consolidated financial statements do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of the Company, all adjustments (consisting of normal recurring accruals) considered necessary to present fairly the consolidated financial statements have been included.

2)    Notes Payable

        Crossmann maintains a $135 million unsecured line of credit, with Bank One, Indiana, N.A. as agent. The line of credit bears interest at the bank's prime lending rate, but permits portions of the outstanding balance to be committed for fixed periods of time at a rate equal to LIBOR plus 1.45%. The credit facility matures April 1, 2004. At March 31, 2002, $59.6 million was outstanding on this line.

        The Company also had approximately $58.3 million in senior notes outstanding as of March 31, 2002. Of this total, $8.3 million was payable through 2004 at a fixed interest rate of 7.625%, payable quarterly. Crossmann had an additional $50.0 million in notes outstanding, payable through 2008 at a fixed interest rate of 7.75%, payable quarterly.

        The note agreements and the bank line of credit require compliance with certain financial and operating covenants and place certain limitations on the Company's investments in land and unconsolidated joint ventures. The agreements also restrict payments of cash dividends on the common shares by the Company.

3)    Subsequent Sale of Company

        On April 16, 2002, the stockholders of Crossmann approved the merger of Crossmann into a wholly-owned subsidiary of Beazer Homes USA, Inc. ("Beazer"), and the merger became effective on April 17, 2002.

        The aggregate merger consideration consisted of approximately $17.60 in cash per Crossmann share outstanding and .3544 of a share of Beazer common stock for each share of Crossmann stock outstanding. The closing price of Beazer's common stock on April 17, 2002 was $81.15.

        On March 18, 2002, Crossmann sent the holders of its outstanding 7.625% Senior Notes due 2004 and 7.75% Senior Notes due 2008 a notice that Crossmann had exercised its option to prepay all of such outstanding notes, for a price equal to the outstanding principal amount and accrued but unpaid interest thereon, plus a make-whole amount. The notes were prepaid on April 17, 2002. The make-whole amount was approximately $0.5 million with respect to the 7.625% Senior Notes due 2004 and $4.8 million with respect to the 7.75% Senior Notes due 2008. The Crossmann credit facility was also paid off and cancelled on April 17, 2002.





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Crossmann Communities, Inc. and Subsidiaries Consolidated Balance Sheet ($ in thousands)
Crossmann Communities, Inc. and Subsidiaries Consolidated Statements of Income (unaudited) (in thousands, except share data)
Crossmann Communities, Inc. and Subsidiaries Consolidated Statements of Cash Flows (unaudited) (in thousands)
CROSSMANN COMMUNITIES, INC. AND SUBSIDIARIES Notes to Unaudited Consolidated Financial Statements