DELAWARE | 001-12822 | 54-2086934 | ||
(State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification No.) |
¨ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
¨ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
¨ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
¨ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 2.02. | Results of Operations and Financial Condition |
Item 9.01. | Financial Statements and Exhibits |
BEAZER HOMES USA, INC. | ||||||||
Date: | November 14, 2017 | By: | /s/ Kenneth F. Khoury | |||||
Kenneth F. Khoury Executive Vice President, Chief Administrative Officer and General Counsel |
• | Net income from continuing operations of $32.0 million |
• | Adjusted EBITDA of $178.8 million, up 14.4% |
• | Homebuilding revenue of $1.9 billion, up 6.2% |
• | 5,525 new home deliveries, up 2.0% |
• | Average selling price of $343.1 thousand, up 4.2% |
• | Homebuilding gross margin was 16.5%. Excluding impairments, abandonments, amortized interest, unexpected warranty costs and additional insurance recoveries, homebuilding gross margin was 21.2%, up 60 basis points |
• | SG&A as a percentage of total revenue was 12.2%, down 10 basis points. This excludes a $2.7 million charge related to the write-off of a legacy investment in the first quarter of Fiscal 2017 |
• | Unit orders of 5,464, up 3.2%. Average community count was 155, down 6.7% |
• | Dollar value of backlog of $665.8 million, up 2.0% |
• | Net income from continuing operations of $33.7 million |
• | Adjusted EBITDA of $76.9 million, up 16.6% |
• | Homebuilding revenue of $665.5 million, up 7.3% |
• | 1,904 new home deliveries, up 2.6% |
• | Average selling price of $349.5 thousand, up 4.6% |
• | Homebuilding gross margin was 17.0%. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 22.0%, up 120 basis points |
• | SG&A as a percentage of total revenue was 10.5%, down 10 basis points |
• | Unit orders of 1,315, down 2.3%. Average community count was 154, down 4.9% |
• | Unrestricted cash at quarter end was $292.1 million |
Quarter Ended September 30, | ||||||||||||
2017 | 2016 | Change* | ||||||||||
New home orders, net of cancellations | 1,315 | 1,346 | (2.3 | )% | ||||||||
Orders per community per month | 2.85 | 2.77 | 2.8 | % | ||||||||
Average active community count | 154 | 162 | (4.9 | )% | ||||||||
Actual community count at quarter-end | 155 | 161 | (3.7 | )% | ||||||||
Cancellation rates | 20.6 | % | 20.4 | % | 20 bps | |||||||
Total home closings | 1,904 | 1,856 | 2.6 | % | ||||||||
Average selling price (ASP) from closings (in thousands) | $ | 349.5 | $ | 334.0 | 4.6 | % | ||||||
Homebuilding revenue (in millions) | $ | 665.5 | $ | 620.0 | 7.3 | % | ||||||
Homebuilding gross margin | 17.0 | % | 16.2 | % | 80 bps | |||||||
Homebuilding gross margin, excluding impairments and abandonments (I&A) | 17.2 | % | 16.2 | % | 100 bps | |||||||
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 22.0 | % | 20.8 | % | 120 bps | |||||||
Income from continuing operations before income taxes (in millions) | $ | 37.7 | $ | 13.6 | $ | 24.0 | ||||||
Expense from income taxes (in millions) | $ | 4.0 | $ | 14.4 | $ | (10.5 | ) | |||||
Income (loss) from continuing operations (in millions) | $ | 33.7 | $ | (0.8 | ) | $ | 34.5 | |||||
Basic income (loss) per share from continuing operations | $ | 1.05 | $ | (0.03 | ) | $ | 1.08 | |||||
Diluted income (loss) per share from continuing operations | $ | 1.03 | $ | (0.03 | ) | $ | 1.06 | |||||
Income from continuing operations before income taxes (in millions) | $ | 37.7 | $ | 13.6 | $ | 24.0 | ||||||
Gain (loss) on debt extinguishment (in millions) | $ | 2.9 | $ | (11.4 | ) | $ | 14.3 | |||||
Inventory impairments and abandonments (in millions) | $ | 1.7 | $ | 0.2 | $ | 1.5 | ||||||
Income from continuing operations excluding gain on debt extinguishment and inventory impairments and abandonments before income taxes (in millions) | $ | 36.5 | $ | 25.2 | $ | 11.3 | ||||||
Net income (loss) | $ | 33.7 | $ | (0.9 | ) | $ | 34.5 | |||||
Land and land development spending (in millions) | $ | 136.4 | $ | 69.0 | $ | 67.4 | ||||||
Adjusted EBITDA (in millions) | $ | 76.9 | $ | 66.0 | $ | 10.9 |
Year Ended September 30, | ||||||||||||
2017 | 2016 | Change* | ||||||||||
New home orders, net of cancellations | 5,464 | 5,297 | 3.2 | % | ||||||||
Orders per community per month | 2.94 | 2.66 | 10.5 | % | ||||||||
Cancellation rates | 18.5 | % | 20.4 | % | -190 bps | |||||||
Total home closings | 5,525 | 5,419 | 2.0 | % | ||||||||
ASP from closings (in thousands) | $ | 343.1 | $ | 329.4 | 4.2 | % | ||||||
Homebuilding revenue (in millions) | $ | 1,895.9 | $ | 1,784.8 | 6.2 | % | ||||||
Homebuilding gross margin | 16.5 | % | 16.5 | % | 0 bps | |||||||
Homebuilding gross margin, excluding I&A | 16.6 | % | 17.3 | % | -70 bps | |||||||
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 21.2 | % | 21.6 | % | -40 bps | |||||||
Homebuilding gross margin, excluding I&A, interest amortized to cost of sales, unexpected warranty costs and additional insurance recoveries from a third-party insurer | 21.2 | % | 20.6 | % | 60 bps | |||||||
Income from continuing operations before income taxes (in millions) | $ | 34.6 | $ | 21.7 | $ | 12.9 | ||||||
Expense from income taxes (in millions) | $ | 2.7 | $ | 16.5 | $ | (13.8 | ) | |||||
Income from continuing operations (in millions) | $ | 32.0 | $ | 5.2 | $ | 26.7 | ||||||
Basic income per share from continuing operations | $ | 1.00 | $ | 0.16 | $ | 0.84 | ||||||
Diluted income per share from continuing operations | $ | 0.99 | $ | 0.16 | $ | 0.83 | ||||||
Income from continuing operations before income taxes (in millions) | $ | 34.6 | $ | 21.7 | $ | 12.9 | ||||||
Loss on debt extinguishment (in millions) | $ | 12.6 | $ | 13.4 | $ | (0.8 | ) | |||||
Inventory impairments and abandonments (in millions) | $ | 2.4 | $ | 15.3 | $ | (12.8 | ) | |||||
Unexpected warranty costs related to Florida stucco issues, net of recoveries (in millions) | $ | — | $ | 3.6 | $ | (3.6 | ) | |||||
Additional insurance recoveries from a third-party insurer (in millions) | $ | — | $ | 15.5 | $ | (15.5 | ) | |||||
Write-off of deposit on legacy land investment | $ | 2.7 | $ | — | $ | 2.7 | ||||||
Income from continuing operations excluding loss on debt extinguishment, inventory impairments and abandonments, unexpected warranty costs (net of recoveries), additional insurance recoveries and write-off of deposit before income taxes (in millions) | $ | 52.3 | $ | 31.3 | $ | 21.0 | ||||||
Net income | $ | 31.8 | $ | 4.7 | $ | 27.1 | ||||||
Land and land development spending (in millions) | $ | 446.4 | $ | 336.9 | $ | 109.5 | ||||||
Adjusted EBITDA (in millions) | $ | 178.8 | $ | 156.3 | $ | 22.5 |
As of September 30, | |||||||||||
2017 | 2016 | Change | |||||||||
Backlog units | 1,855 | 1,916 | (3.2 | )% | |||||||
Dollar value of backlog (in millions) | $ | 665.8 | $ | 652.7 | 2.0 | % | |||||
ASP in backlog (in thousands) | $ | 358.9 | $ | 340.6 | 5.4 | % | |||||
Land and lots controlled | 21,507 | 23,356 | (7.9 | )% |
Three Months Ended | Fiscal Year Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||
Total revenue | $ | 672,981 | $ | 632,121 | $ | 1,916,278 | $ | 1,822,114 | |||||||
Home construction and land sales expenses | 557,928 | 529,531 | 1,600,969 | 1,509,625 | |||||||||||
Inventory impairments and abandonments | 1,693 | 184 | 2,445 | 15,282 | |||||||||||
Gross profit | 113,360 | 102,406 | 312,864 | 297,207 | |||||||||||
Commissions | 26,083 | 24,604 | 74,811 | 70,460 | |||||||||||
General and administrative expenses | 44,624 | 42,604 | 161,906 | 153,628 | |||||||||||
Depreciation and amortization | 4,870 | 4,360 | 14,009 | 13,794 | |||||||||||
Operating income | 37,783 | 30,838 | 62,138 | 59,325 | |||||||||||
Equity in income of unconsolidated entities | 158 | 60 | 371 | 131 | |||||||||||
Loss on extinguishment of debt | 2,933 | (11,393 | ) | (12,630 | ) | (13,423 | ) | ||||||||
Other expense, net | (3,223 | ) | (5,863 | ) | (15,230 | ) | (24,330 | ) | |||||||
Income from continuing operations before income taxes | 37,651 | 13,642 | 34,649 | 21,703 | |||||||||||
Expense from income taxes | 3,958 | 14,431 | 2,696 | 16,498 | |||||||||||
Income (loss) from continuing operations | 33,693 | (789 | ) | 31,953 | 5,205 | ||||||||||
Loss from discontinued operations, net of tax | (39 | ) | (65 | ) | (140 | ) | (512 | ) | |||||||
Net income (loss) | $ | 33,654 | $ | (854 | ) | $ | 31,813 | $ | 4,693 | ||||||
Weighted average number of shares: | |||||||||||||||
Basic | 31,974 | 31,815 | 31,952 | 31,798 | |||||||||||
Diluted | 32,576 | 31,815 | 32,426 | 31,803 | |||||||||||
Basic income (loss) per share: | |||||||||||||||
Continuing operations | $ | 1.05 | $ | (0.03 | ) | $ | 1.00 | $ | 0.16 | ||||||
Discontinued operations | $ | — | $ | — | $ | — | $ | (0.01 | ) | ||||||
Total | $ | 1.05 | $ | (0.03 | ) | $ | 1.00 | $ | 0.15 | ||||||
Diluted income (loss) per share: | |||||||||||||||
Continuing operations | $ | 1.03 | $ | (0.03 | ) | $ | 0.99 | $ | 0.16 | ||||||
Discontinued operations | $ | — | $ | — | $ | — | $ | (0.01 | ) | ||||||
Total | $ | 1.03 | $ | (0.03 | ) | $ | 0.99 | $ | 0.15 |
Three Months Ended | Fiscal Year Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
Capitalized Interest in Inventory | 2017 | 2016 | 2017 | 2016 | |||||||||||
Capitalized interest in inventory, beginning of period | $ | 148,329 | $ | 142,398 | $ | 138,108 | $ | 123,457 | |||||||
Interest incurred | 25,739 | 30,047 | 105,551 | 119,360 | |||||||||||
Capitalized interest impaired | (56 | ) | — | (56 | ) | (710 | ) | ||||||||
Interest expense not qualified for capitalization and included as other expense | (3,404 | ) | (5,917 | ) | (15,636 | ) | (25,388 | ) | |||||||
Capitalized interest amortized to home construction and land sales expenses | (31,405 | ) | (28,420 | ) | (88,764 | ) | (78,611 | ) | |||||||
Capitalized interest in inventory, end of period | $ | 139,203 | $ | 138,108 | $ | 139,203 | $ | 138,108 |
September 30, 2017 | September 30, 2016 | |||||||
ASSETS | ||||||||
Cash and cash equivalents | $ | 292,147 | $ | 228,871 | ||||
Restricted cash | 12,462 | 14,405 | ||||||
Accounts receivable (net of allowance of $330 and $354, respectively) | 36,323 | 53,226 | ||||||
Income tax receivable | 88 | 292 | ||||||
Owned inventory | 1,542,807 | 1,569,279 | ||||||
Investments in unconsolidated entities | 3,994 | 10,470 | ||||||
Deferred tax assets, net | 307,896 | 309,955 | ||||||
Property and equipment, net | 17,566 | 19,138 | ||||||
Other assets | 7,712 | 7,522 | ||||||
Total assets | $ | 2,220,995 | $ | 2,213,158 | ||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||||||||
Trade accounts payable | $ | 103,484 | $ | 104,174 | ||||
Other liabilities | 107,659 | 134,253 | ||||||
Total debt (net of premium of $3,413 and $2,362, respectively, and debt issuance costs of $14,800 and $15,514, respectively) | 1,327,412 | 1,331,878 | ||||||
Total liabilities | $ | 1,538,555 | $ | 1,570,305 | ||||
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, 63,000,000 shares authorized, 33,515,768 issued and outstanding and 33,071,331 issued and outstanding, respectively) | 34 | 33 | ||||||
Paid-in capital | 873,063 | 865,290 | ||||||
Accumulated deficit | (190,657 | ) | (222,470 | ) | ||||
Total stockholders’ equity | 682,440 | 642,853 | ||||||
Total liabilities and stockholders’ equity | $ | 2,220,995 | $ | 2,213,158 | ||||
Inventory Breakdown | ||||||||
Homes under construction | $ | 419,312 | $ | 377,191 | ||||
Development projects in progress | 785,777 | 742,417 | ||||||
Land held for future development | 112,565 | 213,006 | ||||||
Land held for sale | 17,759 | 29,696 | ||||||
Capitalized interest | 139,203 | 138,108 | ||||||
Model homes | 68,191 | 68,861 | ||||||
Total owned inventory | $ | 1,542,807 | $ | 1,569,279 |
Quarter Ended September 30, | Fiscal Year Ended September 30, | |||||||||||||
SELECTED OPERATING DATA | 2017 | 2016 | 2017 | 2016 | ||||||||||
Closings: | ||||||||||||||
West region | 832 | 842 | 2,527 | 2,508 | ||||||||||
East region | 533 | 466 | 1,382 | 1,373 | ||||||||||
Southeast region | 539 | 548 | 1,616 | 1,538 | ||||||||||
Total closings | 1,904 | 1,856 | 5,525 | 5,419 | ||||||||||
New orders, net of cancellations: | ||||||||||||||
West region | 637 | 561 | 2,578 | 2,381 | ||||||||||
East region | 324 | 348 | 1,351 | 1,330 | ||||||||||
Southeast region | 354 | 437 | 1,535 | 1,586 | ||||||||||
Total new orders, net | 1,315 | 1,346 | 5,464 | 5,297 | ||||||||||
Fiscal Year Ended September 30, | ||||||||||||||
Backlog units at end of period: | 2017 | 2016 | ||||||||||||
West region | 879 | 828 | ||||||||||||
East region | 413 | 444 | ||||||||||||
Southeast region | 563 | 644 | ||||||||||||
Total backlog units | 1,855 | 1,916 | ||||||||||||
Dollar value of backlog at end of period (in millions) | $ | 665.8 | $ | 652.7 |
Quarter Ended September 30, | Fiscal Year Ended September 30, | |||||||||||||||
SUPPLEMENTAL FINANCIAL DATA | 2017 | 2016 | 2017 | 2016 | ||||||||||||
Homebuilding revenue: | ||||||||||||||||
West region | $ | 286,564 | $ | 281,987 | $ | 851,472 | $ | 817,971 | ||||||||
East region | 209,301 | 172,787 | 533,585 | 505,198 | ||||||||||||
Southeast region | 169,594 | 165,178 | 510,798 | 461,608 | ||||||||||||
Total homebuilding revenue | $ | 665,459 | $ | 619,952 | $ | 1,895,855 | $ | 1,784,777 | ||||||||
Revenues: | ||||||||||||||||
Homebuilding | $ | 665,459 | $ | 619,952 | $ | 1,895,855 | $ | 1,784,777 | ||||||||
Land sales and other | 7,522 | 12,169 | 20,423 | 37,337 | ||||||||||||
Total revenues | $ | 672,981 | $ | 632,121 | $ | 1,916,278 | $ | 1,822,114 | ||||||||
Gross profit: | ||||||||||||||||
Homebuilding | $ | 113,011 | $ | 100,719 | $ | 312,201 | $ | 293,860 | ||||||||
Land sales and other | 349 | 1,687 | 663 | 3,347 | ||||||||||||
Total gross profit | $ | 113,360 | $ | 102,406 | $ | 312,864 | $ | 297,207 |
Quarter Ended September 30, | Fiscal Year Ended September 30, | ||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||
Homebuilding gross profit/margin | $ | 113,011 | 17.0 | % | $ | 100,719 | 16.2 | % | $ | 312,201 | 16.5 | % | $ | 293,860 | 16.5 | % | |||||||
Inventory impairments and abandonments (I&A) | 1,693 | — | 1,881 | 14,512 | |||||||||||||||||||
Homebuilding gross profit/margin before I&A | 114,704 | 17.2 | % | 100,719 | 16.2 | % | 314,082 | 16.6 | % | 308,372 | 17.3 | % | |||||||||||
Interest amortized to cost of sales | 31,405 | 28,421 | 88,764 | 77,941 | |||||||||||||||||||
Homebuilding gross profit/margin before I&A and interest amortized to cost of sales | 146,109 | 22.0 | % | 129,140 | 20.8 | % | 402,846 | 21.2 | % | 386,313 | 21.6 | % | |||||||||||
Unexpected warranty costs related to Florida stucco issues (net of expected insurance recoveries) | — | — | — | (3,612 | ) | ||||||||||||||||||
Additional insurance recoveries from a third-party insurer | — | — | — | (15,500 | ) | ||||||||||||||||||
Homebuilding gross profit/margin before I&A, interest amortized to cost of sales, unexpected warranty costs and additional insurance recoveries from a third-party insurer | $ | 146,109 | 22.0 | % | $ | 129,140 | 20.8 | % | $ | 402,846 | 21.2 | % | $ | 367,201 | 20.6 | % |
Quarter Ended September 30, | Fiscal Year Ended September 30, | |||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||
Net income (loss) | $ | 33,654 | $ | (854 | ) | $ | 31,813 | $ | 4,693 | |||||||
Expense from income taxes | 3,953 | 14,415 | 2,621 | 16,224 | ||||||||||||
Interest amortized to home construction and land sales expenses and capitalized interest impaired | 31,462 | 28,421 | 88,820 | 79,322 | ||||||||||||
Interest expense not qualified for capitalization | 3,404 | 5,917 | 15,636 | 25,388 | ||||||||||||
EBIT | 72,473 | 47,899 | 138,890 | 125,627 | ||||||||||||
Depreciation and amortization and stock compensation amortization | 5,702 | 6,474 | 22,173 | 21,752 | ||||||||||||
EBITDA | 78,175 | 54,373 | 161,063 | 147,379 | ||||||||||||
(Gain) loss on extinguishment of debt | (2,933 | ) | 11,393 | 12,630 | 13,423 | |||||||||||
Inventory impairments and abandonments | 1,637 | 184 | 2,389 | 14,572 | ||||||||||||
Unexpected warranty costs related to Florida stucco issues (net of expected insurance recoveries) | — | — | — | (3,612 | ) | |||||||||||
Additional insurance recoveries from third-party insurer | — | — | — | (15,500 | ) | |||||||||||
Write-off of deposit on legacy land investment | — | — | 2,700 | — | ||||||||||||
Adjusted EBITDA | $ | 76,879 | $ | 65,950 | $ | 178,782 | $ | 156,262 |