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)) |
Title of each class | Trading Symbol(s) | Name of each exchange on which registered |
Common Stock, $0.001 par value | BZH | New York Stock Exchange |
Item 2.02 | Results of Operations and Financial Condition |
Item 9.01 | Financial Statements and Exhibits |
BEAZER HOMES USA, Inc. | ||||||||
Date: | August 1, 2019 | By: | /s/ Robert L. Salomon | |||||
Robert L. Salomon Executive Vice President and Chief Financial Officer |
• | Net income from continuing operations of $11.6 million, compared to net income from continuing operations of $13.4 million in fiscal third quarter 2018 |
• | Adjusted EBITDA of $38.7 million, down 17.0% |
• | Homebuilding revenue of $482.3 million, down 4.9% on an 8.8% decrease in home closings to 1,269 and a 4.3% increase in average selling price to $380.1 thousand |
• | Homebuilding gross margin was 14.9%, down 150 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 19.4%, down 140 basis points |
• | SG&A as a percentage of total revenue was 12.2%, up 10 basis points year over year |
• | Unit orders of 1,544, up 6.5% on a 10.6% increase in average community count to 174 and a 3.7% decrease in sales/community/month to 3.0 |
• | Dollar value of backlog of $881.6 million, down 4.2% |
• | Unrestricted cash at quarter end was $68.5 million; total liquidity was $173.5 million |
• | Retired $16.6 million of the 6.75% Senior Notes due March 2025, recognizing a $0.4 million pre-tax gain on extinguishment of debt |
• | Commenced a $10.0 million accelerated share repurchase, which settled in July 2019, and repurchased $0.6 million of shares through open market transactions |
Three Months Ended June 30, | |||||||||||
2019 | 2018 | Change* | |||||||||
New home orders, net of cancellations | 1,544 | 1,450 | 6.5 | % | |||||||
Orders per community per month | 3.0 | 3.1 | (3.7 | )% | |||||||
Average active community count | 174 | 157 | 10.6 | % | |||||||
Actual community count at quarter-end | 173 | 158 | 9.5 | % | |||||||
Cancellation rates | 15.2 | % | 18.6 | % | -340 bps | ||||||
Total home closings | 1,269 | 1,391 | (8.8 | )% | |||||||
Average selling price (ASP) from closings (in thousands) | $ | 380.1 | $ | 364.5 | 4.3 | % | |||||
Homebuilding revenue (in millions) | $ | 482.3 | $ | 507.0 | (4.9 | )% | |||||
Homebuilding gross margin | 14.9 | % | 16.4 | % | -150 bps | ||||||
Homebuilding gross margin, excluding impairments and abandonments (I&A) | 14.9 | % | 16.4 | % | -150 bps | ||||||
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 19.4 | % | 20.8 | % | -140 bps | ||||||
Income from continuing operations before income taxes (in millions) | $ | 9.4 | $ | 17.7 | $ | (8.3 | ) | ||||
(Benefit) expense from income taxes (in millions) | $ | (2.2 | ) | $ | 4.3 | $ | (6.5 | ) | |||
Income from continuing operations (in millions) | $ | 11.6 | $ | 13.4 | $ | (1.8 | ) | ||||
Basic income per share from continuing operations | $ | 0.38 | $ | 0.42 | $ | (0.04 | ) | ||||
Diluted income per share from continuing operations | $ | 0.38 | $ | 0.41 | $ | (0.03 | ) | ||||
Income from continuing operations before income taxes (in millions) | $ | 9.4 | $ | 17.7 | $ | (8.3 | ) | ||||
(Gain) on debt extinguishment (in millions) | $ | (0.4 | ) | $ | — | $ | (0.4 | ) | |||
Inventory impairments and abandonments (in millions) | $ | — | $ | 0.2 | $ | (0.2 | ) | ||||
Income from continuing operations excluding gain on debt extinguishment and inventory impairments and abandonments before income taxes (in millions) | $ | 9.0 | $ | 17.9 | $ | (8.9 | ) | ||||
Income from continuing operations excluding gain on debt extinguishment and inventory impairments and abandonments after income taxes (in millions)+ | $ | 11.2 | $ | 13.5 | $ | (2.3 | ) | ||||
Net income | $ | 11.6 | $ | 13.4 | $ | (1.8 | ) | ||||
Land and land development spending (in millions) | $ | 102.8 | $ | 155.5 | $ | (52.7 | ) | ||||
Adjusted EBITDA (in millions) | $ | 38.7 | $ | 46.6 | $ | (7.9 | ) | ||||
LTM Adjusted EBITDA (in millions) | $ | 188.2 | $ | 191.4 | $ | (3.2 | ) |
Nine Months Ended June 30, | |||||||||||
2019 | 2018 | Change* | |||||||||
New home orders, net of cancellations | 4,118 | 4,239 | (2.9 | )% | |||||||
LTM orders per community per month | 2.7 | 3.0 | (10.0 | )% | |||||||
Cancellation rates | 16.1 | % | 17.2 | % | -110 bps | ||||||
Total home closings | 3,486 | 3,723 | (6.4 | )% | |||||||
ASP from closings (in thousands) | $ | 374.1 | $ | 353.4 | 5.9 | % | |||||
Homebuilding revenue (in millions) | $ | 1,304.2 | $ | 1,315.8 | (0.9 | )% | |||||
Homebuilding gross margin | 6.8 | % | 16.5 | % | -970 bps | ||||||
Homebuilding gross margin, excluding impairments and abandonments (I&A) | 15.2 | % | 16.5 | % | -130 bps | ||||||
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 19.6 | % | 21.0 | % | -140 bps | ||||||
(Loss) income from continuing operations before income taxes (in millions) | $ | (126.1 | ) | $ | 7.9 | $ | (134.0 | ) | |||
(Benefit) expense from income taxes (in millions) | $ | (44.3 | ) | $ | 113.4 | $ | (157.7 | ) | |||
Loss from continuing operations (in millions) | $ | (81.9 | ) | $ | (105.5 | ) | $ | 23.6 | |||
Basic and diluted loss per share from continuing operations | $ | (2.65 | ) | $ | (3.29 | ) | $ | 0.64 | |||
(Loss) income from continuing operations before income taxes (in millions) | $ | (126.1 | ) | $ | 7.9 | $ | (134.0 | ) | |||
(Gain) loss on debt extinguishment (in millions) | $ | (0.6 | ) | $ | 25.9 | $ | (26.5 | ) | |||
Inventory impairments and abandonments (in millions) | $ | 148.6 | $ | 0.2 | $ | 148.4 | |||||
Income from continuing operations excluding (gain) loss on debt extinguishment and inventory impairments and abandonments before income taxes (in millions) | $ | 21.9 | $ | 34.0 | $ | (12.1 | ) | ||||
Income from continuing operations excluding (gain) loss on debt extinguishment, inventory impairments and abandonments, and remeasurement of deferred tax assets due to Tax Act after income taxes (in millions)+ | $ | 25.5 | $ | 27.9 | $ | (2.4 | ) | ||||
Net loss | $ | (81.9 | ) | $ | (106.0 | ) | $ | 24.0 | |||
Land and land development spending (in millions) | $ | 363.6 | $ | 440.6 | $ | (77.0 | ) | ||||
Adjusted EBITDA (in millions) | $ | 98.1 | $ | 114.6 | $ | (16.4 | ) |
As of June 30, | ||||||||||
2019 | 2018 | Change | ||||||||
Backlog units | 2,264 | 2,371 | (4.5 | )% | ||||||
Dollar value of backlog (in millions) | $ | 881.6 | $ | 920.7 | (4.2 | )% | ||||
ASP in backlog (in thousands) | $ | 389.4 | $ | 388.3 | 0.3 | % | ||||
Land and lots controlled | 21,717 | 22,524 | (3.6 | )% |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
in thousands (except per share data) | 2019 | 2018 | 2019 | 2018 | |||||||||||
Total revenue | $ | 482,738 | $ | 511,521 | $ | 1,306,038 | $ | 1,339,188 | |||||||
Home construction and land sales expenses | 410,974 | 428,109 | 1,107,681 | 1,119,870 | |||||||||||
Inventory impairments and abandonments | — | 168 | 148,618 | 168 | |||||||||||
Gross profit | 71,764 | 83,244 | 49,739 | 219,150 | |||||||||||
Commissions | 18,230 | 19,535 | 49,965 | 51,225 | |||||||||||
General and administrative expenses | 40,749 | 42,473 | 116,763 | 120,610 | |||||||||||
Depreciation and amortization | 3,242 | 3,656 | 8,912 | 9,229 | |||||||||||
Operating income (loss) | 9,543 | 17,580 | (125,901 | ) | 38,086 | ||||||||||
Equity in income of unconsolidated entities | 299 | 147 | 316 | 302 | |||||||||||
Gain (loss) on extinguishment of debt | 358 | — | 574 | (25,904 | ) | ||||||||||
Other expense, net | (755 | ) | (30 | ) | (1,134 | ) | (4,628 | ) | |||||||
Income (loss) from continuing operations before income taxes | 9,445 | 17,697 | (126,145 | ) | 7,856 | ||||||||||
(Benefit) expense from income taxes | (2,180 | ) | 4,268 | (44,260 | ) | 113,386 | |||||||||
Income (loss) from continuing operations | 11,625 | 13,429 | (81,885 | ) | (105,530 | ) | |||||||||
Loss from discontinued operations, net of tax | (23 | ) | (20 | ) | (64 | ) | (450 | ) | |||||||
Net income (loss) | $ | 11,602 | $ | 13,409 | $ | (81,949 | ) | $ | (105,980 | ) | |||||
Weighted average number of shares: | |||||||||||||||
Basic | 30,250 | 32,147 | 30,926 | 32,113 | |||||||||||
Diluted | 30,489 | 32,726 | 30,926 | 32,113 | |||||||||||
Basic income (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.38 | $ | 0.42 | $ | (2.65 | ) | $ | (3.29 | ) | |||||
Discontinued operations | — | — | — | (0.01 | ) | ||||||||||
Total | $ | 0.38 | $ | 0.42 | $ | (2.65 | ) | $ | (3.30 | ) | |||||
Diluted income (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.38 | $ | 0.41 | $ | (2.65 | ) | $ | (3.29 | ) | |||||
Discontinued operations | — | — | — | (0.01 | ) | ||||||||||
Total | $ | 0.38 | $ | 0.41 | $ | (2.65 | ) | $ | (3.30 | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
Capitalized Interest in Inventory | 2019 | 2018 | 2019 | 2018 | |||||||||||
Capitalized interest in inventory, beginning of period | $ | 144,756 | $ | 149,034 | $ | 144,645 | $ | 139,203 | |||||||
Interest incurred | 26,782 | 25,803 | 77,506 | 76,850 | |||||||||||
Capitalized interest impaired | — | — | (13,907 | ) | — | ||||||||||
Interest expense not qualified for capitalization and included as other expense | (961 | ) | (205 | ) | (1,800 | ) | (5,290 | ) | |||||||
Capitalized interest amortized to home construction and land sales expenses | (21,752 | ) | (22,450 | ) | (57,619 | ) | (58,581 | ) | |||||||
Capitalized interest in inventory, end of period | $ | 148,825 | $ | 152,182 | $ | 148,825 | $ | 152,182 |
in thousands (except share and per share data) | June 30, 2019 | September 30, 2018 | |||||
ASSETS | |||||||
Cash and cash equivalents | $ | 68,491 | $ | 139,805 | |||
Restricted cash | 16,293 | 13,443 | |||||
Accounts receivable (net of allowance of $358 and $378, respectively) | 20,287 | 24,647 | |||||
Owned inventory | 1,702,724 | 1,692,284 | |||||
Investments in unconsolidated entities | 3,941 | 4,035 | |||||
Deferred tax assets, net | 258,713 | 213,955 | |||||
Property and equipment, net | 28,276 | 20,843 | |||||
Goodwill | 11,376 | 9,751 | |||||
Other assets | 10,178 | 9,339 | |||||
Total assets | $ | 2,120,279 | $ | 2,128,102 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Trade accounts payable | $ | 152,441 | $ | 126,432 | |||
Other liabilities | 117,635 | 126,389 | |||||
Total debt (net of premium of $2,061 and $2,640, respectively, and debt issuance costs of $12,027 and $14,336, respectively) | 1,316,367 | 1,231,254 | |||||
Total liabilities | 1,586,443 | 1,484,075 | |||||
Stockholders’ equity: | |||||||
Preferred stock (par value $0.01 per share, 5,000,000 shares authorized, no shares issued) | — | — | |||||
Common stock (par value $0.001 per share, 63,000,000 shares authorized, 31,047,607 issued and outstanding and 33,522,046 issued and outstanding, respectively) | 31 | 34 | |||||
Paid-in capital | 851,786 | 880,025 | |||||
Accumulated deficit | (317,981 | ) | (236,032 | ) | |||
Total stockholders’ equity | 533,836 | 644,027 | |||||
Total liabilities and stockholders’ equity | $ | 2,120,279 | $ | 2,128,102 | |||
Inventory Breakdown | |||||||
Homes under construction | $ | 679,181 | $ | 476,752 | |||
Development projects in progress | 753,048 | 907,793 | |||||
Land held for future development | 28,531 | 83,173 | |||||
Land held for sale | 13,352 | 7,781 | |||||
Capitalized interest | 148,825 | 144,645 | |||||
Model homes | 79,787 | 72,140 | |||||
Total owned inventory | $ | 1,702,724 | $ | 1,692,284 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||
SELECTED OPERATING DATA | 2019 | 2018 | 2019 | 2018 | |||||||
Closings: | |||||||||||
West region | 674 | 701 | 1,881 | 1,879 | |||||||
East region | 246 | 299 | 647 | 803 | |||||||
Southeast region | 349 | 391 | 958 | 1,041 | |||||||
Total closings | 1,269 | 1,391 | 3,486 | 3,723 | |||||||
New orders, net of cancellations: | |||||||||||
West region | 850 | 795 | 2,175 | 2,235 | |||||||
East region | 334 | 274 | 869 | 854 | |||||||
Southeast region | 360 | 381 | 1,074 | 1,150 | |||||||
Total new orders, net | 1,544 | 1,450 | 4,118 | 4,239 |
As of June 30, | |||||||
Backlog units at end of period: | 2019 | 2018 | |||||
West region | 1,152 | 1,235 | |||||
East region | 503 | 464 | |||||
Southeast region | 609 | 672 | |||||
Total backlog units | 2,264 | 2,371 | |||||
Dollar value of backlog at end of period (in millions) | $ | 881.6 | $ | 920.7 |
in thousands | Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||
SUPPLEMENTAL FINANCIAL DATA | 2019 | 2018 | 2019 | 2018 | |||||||||||
Homebuilding revenue: | |||||||||||||||
West region | $ | 238,723 | $ | 241,588 | $ | 658,097 | $ | 642,505 | |||||||
East region | 117,934 | 128,880 | 299,450 | 318,299 | |||||||||||
Southeast region | 125,659 | 136,496 | 346,696 | 355,029 | |||||||||||
Total homebuilding revenue | $ | 482,316 | $ | 506,964 | $ | 1,304,243 | $ | 1,315,833 | |||||||
Revenue: | |||||||||||||||
Homebuilding | $ | 482,316 | $ | 506,964 | $ | 1,304,243 | $ | 1,315,833 | |||||||
Land sales and other | 422 | 4,557 | 1,795 | 23,355 | |||||||||||
Total revenue | $ | 482,738 | $ | 511,521 | $ | 1,306,038 | $ | 1,339,188 | |||||||
Gross profit (loss): | |||||||||||||||
Homebuilding | $ | 71,719 | $ | 83,043 | $ | 88,190 | $ | 217,641 | |||||||
Land sales and other | 45 | 201 | (38,451 | ) | 1,509 | ||||||||||
Total gross loss | $ | 71,764 | $ | 83,244 | $ | 49,739 | $ | 219,150 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||||
Homebuilding gross profit/margin | $ | 71,719 | 14.9 | % | $ | 83,043 | 16.4 | % | $ | 88,190 | 6.8 | % | $ | 217,641 | 16.5 | % | |||||||
Inventory impairments and abandonments (I&A) | — | — | 110,030 | — | |||||||||||||||||||
Homebuilding gross profit/margin before I&A | 71,719 | 14.9 | % | 83,043 | 16.4 | % | 198,220 | 15.2 | % | 217,641 | 16.5 | % | |||||||||||
Interest amortized to cost of sales | 21,752 | 22,441 | 57,619 | 58,564 | |||||||||||||||||||
Homebuilding gross profit/margin before I&A and interest amortized to cost of sales | $ | 93,471 | 19.4 | % | $ | 105,484 | 20.8 | % | $ | 255,839 | 19.6 | % | $ | 276,205 | 21.0 | % |
Three Months Ended June 30, | Nine Months Ended June 30, | LTM Ended June 30,(a) | |||||||||||||||||||||
in thousands | 2019 | 2018 | 2019 | 2018 | 2019 | 2018 | |||||||||||||||||
Net income (loss) | $ | 11,602 | $ | 13,409 | $ | (81,949 | ) | $ | (105,980 | ) | $ | (21,344 | ) | $ | (72,326 | ) | |||||||
(Benefit) expense from income taxes | (2,187 | ) | 4,261 | (44,279 | ) | 113,233 | (63,139 | ) | 117,186 | ||||||||||||||
Interest amortized to home construction and land sales expenses and capitalized interest impaired | 21,752 | 22,450 | 71,526 | 58,581 | 106,058 | 90,043 | |||||||||||||||||
Interest expense not qualified for capitalization | 961 | 205 | 1,800 | 5,290 | 1,835 | 8,694 | |||||||||||||||||
EBIT | 32,128 | 40,325 | (52,902 | ) | 71,124 | 23,410 | 143,597 | ||||||||||||||||
Depreciation and amortization and stock-based compensation amortization | 6,941 | 6,140 | 16,905 | 16,921 | 24,049 | 22,623 | |||||||||||||||||
EBITDA | 39,069 | 46,465 | (35,997 | ) | 88,045 | 47,459 | 166,220 | ||||||||||||||||
(Gain) loss on extinguishment of debt | (358 | ) | — | (574 | ) | 25,904 | 1,361 | 22,971 | |||||||||||||||
Inventory impairments and abandonments (b) | — | 168 | 134,711 | 618 | 139,081 | 2,255 | |||||||||||||||||
Joint venture impairment and abandonment charges | — | — | — | — | 341 | — | |||||||||||||||||
Adjusted EBITDA | $ | 38,711 | $ | 46,633 | $ | 98,140 | $ | 114,567 | $ | 188,242 | $ | 191,446 |