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: | May 2, 2018 | By: | /s/ Keith L. Belknap | |||||
Keith L. Belknap Executive Vice President, General Counsel |
• | Net income from continuing operations of $11.6 million, compared to net loss of $7.5 million in Fiscal 2017 |
• | Adjusted EBITDA of $39.5 million, up 19.1% |
• | Homebuilding revenue of $441.1 million, up 4.6%, on a 2.2% increase in home closings to 1,266 and a 2.3% increase in average selling price to $348.4 thousand |
• | Homebuilding gross margin was 16.9%, up 90 basis points. Excluding impairments, abandonments and interest amortized, homebuilding gross margin was 21.3%, up 60 basis points |
• | SG&A as a percentage of total revenue was 12.8%, down 50 basis points |
• | Unit orders of 1,679, up 8.4% on a 10.3% increase in sales/community/month to 3.7 and a 1.7% decline in average community count to 151 |
• | Dollar value of backlog of $885.4 million, up 14.0% |
• | Unrestricted cash at quarter end was $158.8 million |
Three Months Ended March 31, | ||||||||||||
2018 | 2017 | Change* | ||||||||||
New home orders, net of cancellations | 1,679 | 1,549 | 8.4 | % | ||||||||
Orders per community per month | 3.7 | 3.4 | 10.3 | % | ||||||||
Average active community count | 151 | 154 | (1.7 | )% | ||||||||
Actual community count at quarter-end | 153 | 158 | (3.2 | )% | ||||||||
Cancellation rates | 14.9 | % | 16.6 | % | -170 bps | |||||||
Total home closings | 1,266 | 1,239 | 2.2 | % | ||||||||
Average selling price (ASP) from closings (in thousands) | $ | 348.4 | $ | 340.5 | 2.3 | % | ||||||
Homebuilding revenue (in millions) | $ | 441.1 | $ | 421.9 | 4.6 | % | ||||||
Homebuilding gross margin | 16.9 | % | 16.0 | % | 90 bps | |||||||
Homebuilding gross margin, excluding impairments and abandonments and interest amortized to cost of sales | 21.3 | % | 20.7 | % | 60 bps | |||||||
Income (loss) from continuing operations before income taxes (in millions) | $ | 12.6 | $ | (12.0 | ) | $ | 24.6 | |||||
Expense (benefit) from income taxes (in millions) | $ | 1.0 | $ | (4.5 | ) | $ | 5.5 | |||||
Income (loss) from continuing operations (in millions) | $ | 11.6 | $ | (7.5 | ) | $ | 19.1 | |||||
Basic and diluted income (loss) per share from continuing operations | $ | 0.36 | $ | (0.23 | ) | $ | 0.59 | |||||
Income (loss) from continuing operations before income taxes (in millions) | $ | 12.6 | $ | (12.0 | ) | $ | 24.6 | |||||
Loss on debt extinguishment (in millions) | $ | — | $ | 15.6 | $ | (15.6 | ) | |||||
Inventory impairments and abandonments (in millions) | $ | — | $ | 0.3 | $ | (0.3 | ) | |||||
Income from continuing operations excluding loss on debt extinguishment and inventory impairments and abandonments before income taxes (in millions) | $ | 12.6 | $ | 3.9 | $ | 8.7 | ||||||
Net income (loss) | $ | 11.6 | $ | (7.5 | ) | $ | 19.1 | |||||
Net income excluding loss on debt extinguishment and inventory impairments and abandonments (in millions)*+ | $ | 11.6 | $ | 2.5 | $ | 9.1 | ||||||
Land and land development spending (in millions) | $ | 143.4 | $ | 102.9 | $ | 40.5 | ||||||
Adjusted EBITDA (in millions) | $ | 39.5 | $ | 33.2 | $ | 6.3 | ||||||
LTM Adjusted EBITDA (in millions) | $ | 189.1 | $ | 161.8 | $ | 27.3 |
Six Months Ended March 31, | ||||||||||||
2018 | 2017 | Change* | ||||||||||
New home orders, net of cancellations | 2,789 | 2,554 | 9.2 | % | ||||||||
LTM orders per community per month | 3.1 | 2.8 | 10.7 | % | ||||||||
Cancellation rates | 16.5 | % | 18.6 | % | -210 bps | |||||||
Total home closings | 2,332 | 2,234 | 4.4 | % | ||||||||
ASP from closings (in thousands) | $ | 346.9 | $ | 339.3 | 2.2 | % | ||||||
Homebuilding revenue (in millions) | $ | 808.9 | $ | 758.0 | 6.7 | % | ||||||
Homebuilding gross margin | 16.6 | % | 15.9 | % | 70 bps | |||||||
Homebuilding gross margin, excluding impairments and abandonments and interest amortized to cost of sales | 21.1 | % | 20.6 | % | 50 bps | |||||||
Loss from continuing operations before income taxes (in millions) | $ | (9.8 | ) | $ | (15.9 | ) | $ | 6.0 | ||||
Expense (benefit) from income taxes (in millions) | $ | 109.1 | $ | (7.0 | ) | $ | 116.1 | |||||
Loss from continuing operations (in millions)* | $ | (119.0 | ) | $ | (8.9 | ) | $ | (110.1 | ) | |||
Basic and diluted loss per share from continuing operations | $ | (3.71 | ) | $ | (0.27 | ) | $ | (3.44 | ) | |||
Loss from continuing operations before income taxes (in millions) | $ | (9.8 | ) | $ | (15.9 | ) | $ | 6.0 | ||||
Loss on debt extinguishment (in millions) | $ | 25.9 | $ | 15.6 | $ | 10.3 | ||||||
Inventory impairments and abandonments (in millions) | $ | — | $ | 0.3 | $ | (0.3 | ) | |||||
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 and write-off of deposit before income taxes (in millions) | $ | 16.1 | $ | 2.7 | $ | 13.4 | ||||||
Net loss | $ | (119.4 | ) | $ | (9.0 | ) | $ | (110.4 | ) | |||
Net income excluding loss on debt extinguishment, inventory impairments and abandonments and write-off of deposit (in millions)*+ | $ | 14.3 | $ | 2.5 | $ | 11.8 | ||||||
Land and land development spending (in millions) | $ | 285.1 | $ | 206.1 | $ | 79.0 | ||||||
Adjusted EBITDA (in millions) | $ | 67.9 | $ | 57.6 | $ | 10.3 |
As of March 31, | |||||||||||
2018 | 2017 | Change | |||||||||
Backlog units | 2,312 | 2,236 | 3.4 | % | |||||||
Dollar value of backlog (in millions) | $ | 885.4 | $ | 776.4 | 14.0 | % | |||||
ASP in backlog (in thousands) | $ | 383.0 | $ | 347.2 | 10.3 | % | |||||
Land and lots controlled | 22,092 | 23,181 | (4.7 | )% |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||
Total revenue | $ | 455,178 | $ | 425,468 | $ | 827,667 | $ | 764,709 | |||||||
Home construction and land sales expenses | 380,101 | 357,788 | 691,761 | 643,366 | |||||||||||
Inventory impairments and abandonments | — | 282 | — | 282 | |||||||||||
Gross profit | 75,077 | 67,398 | 135,906 | 121,061 | |||||||||||
Commissions | 17,334 | 16,632 | 31,690 | 29,955 | |||||||||||
General and administrative expenses | 40,852 | 40,100 | 78,137 | 76,488 | |||||||||||
Depreciation and amortization | 3,066 | 3,155 | 5,573 | 5,832 | |||||||||||
Operating income | 13,825 | 7,511 | 20,506 | 8,786 | |||||||||||
Equity in income of unconsolidated entities | 256 | 33 | 155 | 55 | |||||||||||
Loss on extinguishment of debt | — | (15,563 | ) | (25,904 | ) | (15,563 | ) | ||||||||
Other expense, net | (1,453 | ) | (3,940 | ) | (4,598 | ) | (9,136 | ) | |||||||
Income (loss) from continuing operations before income taxes | 12,628 | (11,959 | ) | (9,841 | ) | (15,858 | ) | ||||||||
Expense (benefit) from income taxes | 1,012 | (4,464 | ) | 109,118 | (7,004 | ) | |||||||||
Income (loss) from continuing operations | 11,616 | (7,495 | ) | (118,959 | ) | (8,854 | ) | ||||||||
Loss from discontinued operations, net of tax | (58 | ) | (40 | ) | (430 | ) | (110 | ) | |||||||
Net income (loss) and comprehensive income (loss) | $ | 11,558 | $ | (7,535 | ) | $ | (119,389 | ) | $ | (8,964 | ) | ||||
Weighted average number of shares: | |||||||||||||||
Basic | 32,140 | 31,969 | 32,097 | 31,931 | |||||||||||
Diluted | 32,721 | 31,969 | 32,097 | 31,931 | |||||||||||
Basic earnings (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.36 | $ | (0.23 | ) | $ | (3.71 | ) | $ | (0.27 | ) | ||||
Discontinued operations | — | — | (0.01 | ) | — | ||||||||||
Total | $ | 0.36 | $ | (0.23 | ) | $ | (3.72 | ) | $ | (0.27 | ) | ||||
Diluted income (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.36 | $ | (0.23 | ) | $ | (3.71 | ) | $ | (0.27 | ) | ||||
Discontinued operations | (0.01 | ) | — | (0.01 | ) | — | |||||||||
Total | $ | 0.35 | $ | (0.23 | ) | $ | (3.72 | ) | $ | (0.27 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
Capitalized Interest in Inventory | 2018 | 2017 | 2018 | 2017 | |||||||||||
Capitalized interest in inventory, beginning of period | $ | 144,847 | $ | 144,299 | $ | 139,203 | $ | 138,108 | |||||||
Interest incurred | 25,492 | 26,482 | 51,047 | 53,569 | |||||||||||
Interest expense not qualified for capitalization and included as other expense | (1,650 | ) | (4,046 | ) | (5,085 | ) | (9,298 | ) | |||||||
Capitalized interest amortized to home construction and land sales expenses | (19,655 | ) | (19,819 | ) | (36,131 | ) | (35,463 | ) | |||||||
Capitalized interest in inventory, end of period | $ | 149,034 | $ | 146,916 | $ | 149,034 | $ | 146,916 |
March 31, 2018 | September 30, 2017 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 158,787 | $ | 292,147 | |||
Restricted cash | 12,783 | 12,462 | |||||
Accounts receivable (net of allowance of $346 and $330, respectively) | 30,183 | 36,323 | |||||
Income tax receivable | 112 | 88 | |||||
Owned Inventory | 1,677,361 | 1,542,807 | |||||
Investments in unconsolidated entities | 4,293 | 3,994 | |||||
Deferred tax assets, net | 199,229 | 307,896 | |||||
Property and equipment, net | 20,166 | 17,566 | |||||
Other assets | 4,589 | 7,712 | |||||
Total assets | $ | 2,107,503 | $ | 2,220,995 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Trade accounts payable | $ | 117,143 | $ | 103,484 | |||
Other liabilities | 97,937 | 107,659 | |||||
Total debt (net of premium of $3,027 and $3,413, respectively, and debt issuance costs of $15,905 and $14,800, respectively) | 1,325,457 | 1,327,412 | |||||
Total liabilities | 1,540,537 | 1,538,555 | |||||
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, 33,628,126 issued and outstanding and 33,515,768 issued and outstanding, respectively) | 34 | 34 | |||||
Paid-in capital | 876,978 | 873,063 | |||||
Accumulated deficit | (310,046 | ) | (190,657 | ) | |||
Total stockholders’ equity | 566,966 | 682,440 | |||||
Total liabilities and stockholders’ equity | $ | 2,107,503 | $ | 2,220,995 | |||
Inventory Breakdown | |||||||
Homes under construction | $ | 527,102 | $ | 419,312 | |||
Development projects in progress | 825,355 | 785,777 | |||||
Land held for future development | 87,718 | 112,565 | |||||
Land held for sale | 9,927 | 17,759 | |||||
Capitalized interest | 149,034 | 139,203 | |||||
Model homes | 78,225 | 68,191 | |||||
Total owned inventory | $ | 1,677,361 | $ | 1,542,807 |
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||
SELECTED OPERATING DATA | 2018 | 2017 | 2018 | 2017 | ||||||||||
Closings: | ||||||||||||||
West region | 652 | 561 | 1,178 | 1,071 | ||||||||||
East region | 279 | 286 | 504 | 503 | ||||||||||
Southeast region | 335 | 392 | 650 | 660 | ||||||||||
Total closings | 1,266 | 1,239 | 2,332 | 2,234 | ||||||||||
New orders, net of cancellations: | ||||||||||||||
West region | 906 | 683 | 1,440 | 1,150 | ||||||||||
East region | 321 | 414 | 580 | 642 | ||||||||||
Southeast region | 452 | 452 | 769 | 762 | ||||||||||
Total new orders, net | 1,679 | 1,549 | 2,789 | 2,554 | ||||||||||
As of March 31, | ||||||||||||||
Backlog units at end of period: | 2018 | 2017 | ||||||||||||
West region | 1,141 | 907 | ||||||||||||
East region | 489 | 583 | ||||||||||||
Southeast region | 682 | 746 | ||||||||||||
Total backlog units | 2,312 | 2,236 | ||||||||||||
Dollar value of backlog at end of period (in millions) | $ | 885.4 | $ | 776.4 |
Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||||
SUPPLEMENTAL FINANCIAL DATA | 2018 | 2017 | 2018 | 2017 | ||||||||||||
Homebuilding revenue: | ||||||||||||||||
West region | $ | 224,361 | $ | 185,155 | $ | 400,917 | $ | 356,904 | ||||||||
East region | 103,731 | 113,279 | 189,419 | 194,529 | ||||||||||||
Southeast region | 113,023 | 123,440 | 218,533 | 206,567 | ||||||||||||
Total homebuilding revenue | $ | 441,115 | $ | 421,874 | $ | 808,869 | $ | 758,000 | ||||||||
Revenues: | ||||||||||||||||
Homebuilding | $ | 441,115 | $ | 421,874 | $ | 808,869 | $ | 758,000 | ||||||||
Land sales and other | 14,063 | 3,594 | 18,798 | 6,709 | ||||||||||||
Total revenues | $ | 455,178 | $ | 425,468 | $ | 827,667 | $ | 764,709 | ||||||||
Gross profit: | ||||||||||||||||
Homebuilding | $ | 74,366 | $ | 67,324 | $ | 134,598 | $ | 120,528 | ||||||||
Land sales and other | 711 | 74 | 1,308 | 533 | ||||||||||||
Total gross profit | $ | 75,077 | $ | 67,398 | $ | 135,906 | $ | 121,061 |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||||||
Homebuilding gross profit/margin | $ | 74,366 | 16.9 | % | $ | 67,324 | 16.0 | % | $ | 134,598 | 16.6 | % | $ | 120,528 | 15.9 | % | |||||||
Inventory impairments and abandonments (I&A) | — | 188 | — | 188 | |||||||||||||||||||
Homebuilding gross profit/margin before I&A | 74,366 | 16.9 | % | 67,512 | 16.0 | % | 134,598 | 16.6 | % | 120,716 | 15.9 | % | |||||||||||
Interest amortized to cost of sales | 19,655 | 19,819 | 36,123 | 35,463 | |||||||||||||||||||
Homebuilding gross profit/margin before I&A and interest amortized to cost of sales | $ | 94,021 | 21.3 | % | $ | 87,331 | 20.7 | % | $ | 170,721 | 21.1 | % | $ | 156,179 | 20.6 | % |
Three Months Ended March 31, | Six Months Ended March 31, | LTM Ended March 31,(a) | ||||||||||||||||||||||
(In thousands) | 2018 | 2017 | 2018 | 2017 | 2018 | 2017 | ||||||||||||||||||
Net income (loss) | $ | 11,558 | $ | (7,535 | ) | $ | (119,389 | ) | $ | (8,964 | ) | $ | (78,612 | ) | $ | (4,036 | ) | |||||||
Expense (benefit) from income taxes | 993 | (4,493 | ) | 108,972 | (7,072 | ) | 118,665 | 12,511 | ||||||||||||||||
Interest amortized to home construction and land sales expenses and capitalized interest impaired | 19,655 | 19,819 | 36,131 | 35,463 | 89,488 | 84,977 | ||||||||||||||||||
Interest expense not qualified for capitalization | 1,650 | 4,046 | 5,085 | 9,298 | 11,423 | 20,621 | ||||||||||||||||||
EBIT | 33,856 | 11,837 | 30,799 | 28,725 | 140,964 | 114,073 | ||||||||||||||||||
Depreciation and amortization and stock-based compensation amortization | 5,664 | 5,495 | 10,781 | 10,354 | 22,600 | 22,272 | ||||||||||||||||||
EBITDA | 39,520 | 17,332 | 41,580 | 39,079 | 163,564 | 136,345 | ||||||||||||||||||
Loss on extinguishment of debt | — | 15,563 | 25,904 | 15,563 | 22,971 | 26,527 | ||||||||||||||||||
Inventory impairments and abandonments (b) | — | 282 | 450 | 282 | 2,557 | 11,757 | ||||||||||||||||||
Additional insurance recoveries from third-party insurer | — | — | — | — | — | (15,500 | ) | |||||||||||||||||
Write-off of deposit on legacy land investment | — | — | — | 2,700 | — | 2,700 | ||||||||||||||||||
Adjusted EBITDA | $ | 39,520 | $ | 33,177 | $ | 67,934 | $ | 57,624 | $ | 189,092 | $ | 161,829 |