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: | April 30, 2020 | By: | /s/ Robert L. Salomon | |||||
Robert L. Salomon Executive Vice President and Chief Financial Officer |
• | Net income from continuing operations of $10.6 million, compared to net loss from continuing operations of $100.8 million in fiscal second quarter 2019, which included an impairment charge of $147.6 million pre-tax |
• | Adjusted EBITDA of $43.9 million, up 34.7% |
• | Homebuilding revenue of $488.0 million, up 15.9% on a 12.6% increase in home closings to 1,277 and a 2.9% increase in average selling price to $382.1 thousand |
• | Homebuilding gross margin was 16.1%. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 20.8%, up 100 basis points |
• | SG&A as a percentage of total revenue was 12.0%, down 70 basis points year-over-year |
• | Unit orders of 1,661, up 3.9% on an increase in average community count to 167 and a slight increase in orders/community/month to 3.3 |
• | Dollar value of backlog of $895.0 million, up 14.3% |
Three Months Ended March 31, | |||||||||||
2020 | 2019 | Change* | |||||||||
New home orders, net of cancellations | 1,661 | 1,598 | 3.9 | % | |||||||
Orders per community per month | 3.3 | 3.3 | 1.7 | % | |||||||
Average active community count | 167 | 163 | 2.2 | % | |||||||
Actual community count at quarter-end | 166 | 166 | — | % | |||||||
Cancellation rates | 15.8 | % | 14.5 | % | 130 bps | ||||||
Total home closings | 1,277 | 1,134 | 12.6 | % | |||||||
Average selling price (ASP) from closings (in thousands) | $ | 382.1 | $ | 371.2 | 2.9 | % | |||||
Homebuilding revenue (in millions) | $ | 488.0 | $ | 420.9 | 15.9 | % | |||||
Homebuilding gross margin | 16.1 | % | (10.5 | )% | 2660 bps | ||||||
Homebuilding gross margin, excluding impairments and abandonments (I&A) | 16.1 | % | 15.4 | % | 70 bps | ||||||
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 20.8 | % | 19.8 | % | 100 bps | ||||||
Income (loss) from continuing operations before income taxes (in millions) | $ | 14.8 | $ | (139.0 | ) | $ | 153.8 | ||||
Expense (benefit) from income taxes (in millions) | $ | 4.2 | $ | (38.2 | ) | $ | 42.3 | ||||
Income (loss) from continuing operations (in millions) | $ | 10.6 | $ | (100.8 | ) | $ | 111.4 | ||||
Basic income (loss) per share from continuing operations | $ | 0.36 | $ | (3.28 | ) | $ | 3.64 | ||||
Diluted income (loss) per share from continuing operations | $ | 0.35 | $ | (3.28 | ) | $ | 3.63 | ||||
Income (loss) from continuing operations before income taxes (in millions) | $ | 14.8 | $ | (139.0 | ) | $ | 153.8 | ||||
Gain on debt extinguishment (in millions) | $ | — | $ | 0.2 | $ | 0.2 | |||||
Inventory impairments and abandonments (in millions) | $ | — | $ | (147.6 | ) | $ | (147.6 | ) | |||
Income from continuing operations excluding gain on debt extinguishment and inventory impairments and abandonments before income taxes (in millions) | $ | 14.8 | $ | 8.4 | $ | 6.4 | |||||
Income from continuing operations excluding gain on debt extinguishment and inventory impairments and abandonments after income taxes (in millions)+ | $ | 10.6 | $ | 6.2 | $ | 4.4 | |||||
Net income (loss) | $ | 10.6 | $ | (100.9 | ) | $ | 111.5 | ||||
Land and land development spending (in millions) | $ | 123.0 | $ | 139.9 | $ | (16.9 | ) | ||||
Adjusted EBITDA (in millions) | $ | 43.9 | $ | 32.6 | $ | 11.3 | |||||
LTM Adjusted EBITDA (in millions) | $ | 194.0 | $ | 196.2 | $ | (2.1 | ) |
Six Months Ended March 31, | |||||||||||
2020 | 2019 | Change* | |||||||||
New home orders, net of cancellations | 2,912 | 2,574 | 13.1 | % | |||||||
LTM orders per community per month | 2.9 | 2.8 | 3.6 | % | |||||||
Cancellation rates | 15.4 | % | 16.6 | % | -120 bps | ||||||
Total home closings | 2,389 | 2,217 | 7.8 | % | |||||||
ASP from closings (in thousands) | $ | 379.0 | $ | 370.7 | 2.2 | % | |||||
Homebuilding revenue (in millions) | $ | 905.4 | $ | 821.9 | 10.2 | % | |||||
Homebuilding gross margin | 15.7 | % | 2.0 | % | 1370 bps | ||||||
Homebuilding gross margin, excluding impairments and abandonments (I&A) | 15.7 | % | 15.4 | % | 30 bps | ||||||
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 20.3 | % | 19.8 | % | 50 bps | ||||||
Income (loss) from continuing operations before income taxes (in millions) | $ | 17.4 | $ | (135.6 | ) | $ | 153.0 | ||||
Expense (benefit) from income taxes (in millions) | $ | 4.0 | $ | (42.1 | ) | $ | 46.0 | ||||
Income (loss) from continuing operations (in millions) | $ | 13.4 | $ | (93.5 | ) | $ | 106.9 | ||||
Basic and diluted income (loss) per share from continuing operations | $ | 0.45 | $ | (2.99 | ) | $ | 3.44 | ||||
Income (loss) from continuing operations before income taxes (in millions) | $ | 17.4 | $ | (135.6 | ) | $ | 153.0 | ||||
Gain on debt extinguishment (in millions) | $ | — | $ | 0.2 | $ | (0.2 | ) | ||||
Inventory impairments and abandonments (in millions) | $ | — | $ | (148.6 | ) | $ | (148.6 | ) | |||
Income from continuing operations excluding gain on debt extinguishment and inventory impairments and abandonments before income taxes (in millions) | $ | 17.4 | $ | 12.8 | $ | 4.6 | |||||
Income from continuing operations excluding gain on debt extinguishment and inventory impairments and abandonments (in millions)+ | $ | 13.4 | $ | 14.1 | $ | (0.7 | ) | ||||
Net income (loss) | $ | 13.4 | $ | (93.6 | ) | $ | 106.9 | ||||
Land and land development spending (in millions) | $ | 269.0 | $ | 260.9 | $ | 8.1 | |||||
Adjusted EBITDA (in millions) | $ | 73.3 | $ | 59.4 | $ | 13.8 |
As of March 31, | ||||||||||
2020 | 2019 | Change | ||||||||
Backlog units | 2,231 | 1,989 | 12.2 | % | ||||||
Dollar value of backlog (in millions) | $ | 895.0 | $ | 783.3 | 14.3 | % | ||||
ASP in backlog (in thousands) | $ | 401.2 | $ | 393.8 | 1.9 | % | ||||
Land and lots controlled | 19,654 | 22,383 | (12.2 | )% |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
in thousands (except per share data) | 2020 | 2019 | 2020 | 2019 | |||||||||||
Total revenue | $ | 489,413 | $ | 421,260 | $ | 907,217 | $ | 823,300 | |||||||
Home construction and land sales expenses | 410,568 | 356,329 | 765,235 | 696,707 | |||||||||||
Inventory impairments and abandonments | — | 147,611 | — | 148,618 | |||||||||||
Gross profit (loss) | 78,845 | (82,680 | ) | 141,982 | (22,025 | ) | |||||||||
Commissions | 18,744 | 15,998 | 34,809 | 31,735 | |||||||||||
General and administrative expenses | 40,050 | 37,372 | 79,749 | 76,014 | |||||||||||
Depreciation and amortization | 3,627 | 2,900 | 7,054 | 5,670 | |||||||||||
Operating income (loss) | 16,424 | (138,950 | ) | 20,370 | (135,444 | ) | |||||||||
Equity in income of unconsolidated entities | 147 | 81 | 134 | 17 | |||||||||||
Gain on extinguishment of debt | — | 216 | — | 216 | |||||||||||
Other expense, net | (1,786 | ) | (337 | ) | (3,126 | ) | (379 | ) | |||||||
Income (loss) from continuing operations before income taxes | 14,785 | (138,990 | ) | 17,378 | (135,590 | ) | |||||||||
Expense (benefit) from income taxes | 4,170 | (38,158 | ) | 3,959 | (42,080 | ) | |||||||||
Income (loss) from continuing operations | 10,615 | (100,832 | ) | 13,419 | (93,510 | ) | |||||||||
Loss from discontinued operations, net of tax | (1 | ) | (30 | ) | (59 | ) | (41 | ) | |||||||
Net income (loss) | $ | 10,614 | $ | (100,862 | ) | $ | 13,360 | $ | (93,551 | ) | |||||
Weighted average number of shares: | |||||||||||||||
Basic | 29,868 | 30,714 | 29,808 | 31,263 | |||||||||||
Diluted | 29,975 | 30,714 | 30,078 | 31,263 | |||||||||||
Basic income (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.36 | $ | (3.28 | ) | $ | 0.45 | $ | (2.99 | ) | |||||
Discontinued operations | — | — | — | — | |||||||||||
Total | $ | 0.36 | $ | (3.28 | ) | $ | 0.45 | $ | (2.99 | ) | |||||
Diluted income (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.35 | $ | (3.28 | ) | $ | 0.45 | $ | (2.99 | ) | |||||
Discontinued operations | — | — | — | — | |||||||||||
Total | $ | 0.35 | $ | (3.28 | ) | $ | 0.45 | $ | (2.99 | ) |
Three Months Ended | Six Months Ended | ||||||||||||||
March 31, | March 31, | ||||||||||||||
Capitalized Interest in Inventory | 2020 | 2019 | 2020 | 2019 | |||||||||||
Capitalized interest in inventory, beginning of period | $ | 137,010 | $ | 151,886 | $ | 136,565 | $ | 144,645 | |||||||
Interest incurred | 22,271 | 25,803 | 43,827 | 50,724 | |||||||||||
Capitalized interest impaired | — | (13,792 | ) | — | (13,907 | ) | |||||||||
Interest expense not qualified for capitalization and included as other expense | (1,928 | ) | (597 | ) | (3,370 | ) | (839 | ) | |||||||
Capitalized interest amortized to home construction and land sales expenses | (22,660 | ) | (18,544 | ) | (42,329 | ) | (35,867 | ) | |||||||
Capitalized interest in inventory, end of period | $ | 134,693 | $ | 144,756 | $ | 134,693 | $ | 144,756 |
in thousands (except share and per share data) | March 31, 2020 | September 30, 2019 | |||||
ASSETS | |||||||
Cash and cash equivalents | $ | 294,265 | $ | 106,741 | |||
Restricted cash | 18,282 | 16,053 | |||||
Accounts receivable (net of allowance of $309 and $304, respectively) | 20,574 | 26,395 | |||||
Income tax receivable | 9,224 | 4,935 | |||||
Owned inventory | 1,595,300 | 1,504,248 | |||||
Investments in unconsolidated entities | 4,040 | 3,962 | |||||
Deferred tax assets, net | 238,766 | 246,957 | |||||
Property and equipment, net | 25,820 | 27,421 | |||||
Operating lease right-of-use assets | 15,109 | — | |||||
Goodwill | 11,376 | 11,376 | |||||
Other assets | 6,239 | 9,556 | |||||
Total assets | $ | 2,238,995 | $ | 1,957,644 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Trade accounts payable | $ | 137,238 | $ | 131,152 | |||
Operating lease liabilities | $ | 17,147 | $ | — | |||
Other liabilities | 108,336 | 109,429 | |||||
Total debt (net of debt issuance costs of $11,867 and $12,470, respectively) | 1,428,792 | 1,178,309 | |||||
Total liabilities | 1,691,513 | 1,418,890 | |||||
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, 31,020,398 issued and outstanding and 30,933,110 issued and outstanding, respectively) | 31 | 31 | |||||
Paid-in capital | 849,643 | 854,275 | |||||
Accumulated deficit | (302,192 | ) | (315,552 | ) | |||
Total stockholders’ equity | 547,482 | 538,754 | |||||
Total liabilities and stockholders’ equity | $ | 2,238,995 | $ | 1,957,644 | |||
Inventory Breakdown | |||||||
Homes under construction | $ | 634,380 | $ | 507,542 | |||
Development projects in progress | 706,691 | 738,201 | |||||
Land held for future development | 28,531 | 28,531 | |||||
Land held for sale | 10,716 | 12,662 | |||||
Capitalized interest | 134,693 | 136,565 | |||||
Model homes | 80,289 | 80,747 | |||||
Total owned inventory | $ | 1,595,300 | $ | 1,504,248 |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||
SELECTED OPERATING DATA | 2020 | 2019 | 2020 | 2019 | |||||||
Closings: | |||||||||||
West region | 735 | 606 | 1,429 | 1,207 | |||||||
East region | 235 | 213 | 427 | 401 | |||||||
Southeast region | 307 | 315 | 533 | 609 | |||||||
Total closings | 1,277 | 1,134 | 2,389 | 2,217 | |||||||
New orders, net of cancellations: | |||||||||||
West region | 953 | 806 | 1,690 | 1,325 | |||||||
East region | 351 | 334 | 584 | 535 | |||||||
Southeast region | 357 | 458 | 638 | 714 | |||||||
Total new orders, net | 1,661 | 1,598 | 2,912 | 2,574 |
As of March 31, | ||||||||
Backlog units at end of period: | 2020 | 2019 | ||||||
West region | 1,243 | 976 | ||||||
East region | 498 | 415 | ||||||
Southeast region | 490 | 598 | ||||||
Total backlog units | 2,231 | 1,989 | ||||||
Dollar value of backlog at end of period (in millions) | $ | 895.0 | $ | 783.3 |
in thousands | Three Months Ended March 31, | Six Months Ended March 31, | |||||||||||||
SUPPLEMENTAL FINANCIAL DATA | 2020 | 2019 | 2020 | 2019 | |||||||||||
Homebuilding revenue: | |||||||||||||||
West region | $ | 267,231 | $ | 210,430 | $ | 521,629 | $ | 419,374 | |||||||
East region | 110,011 | 93,751 | 187,656 | 181,516 | |||||||||||
Southeast region | 110,744 | 116,764 | 196,100 | 221,037 | |||||||||||
Total homebuilding revenue | $ | 487,986 | $ | 420,945 | $ | 905,385 | $ | 821,927 | |||||||
Revenue: | |||||||||||||||
Homebuilding | $ | 487,986 | $ | 420,945 | $ | 905,385 | $ | 821,927 | |||||||
Land sales and other | 1,427 | 315 | 1,832 | 1,373 | |||||||||||
Total revenue | $ | 489,413 | $ | 421,260 | $ | 907,217 | $ | 823,300 | |||||||
Gross profit (loss): | |||||||||||||||
Homebuilding | $ | 78,744 | $ | (44,148 | ) | $ | 141,852 | $ | 16,471 | ||||||
Land sales and other | 101 | (38,532 | ) | 130 | (38,496 | ) | |||||||||
Total gross profit (loss) | $ | 78,845 | $ | (82,680 | ) | $ | 141,982 | $ | (22,025 | ) |
Three Months Ended March 31, | Six Months Ended March 31, | ||||||||||||||||||||||
in thousands | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||||
Homebuilding gross profit (loss)/margin | $ | 78,744 | 16.1 | % | $ | (44,148 | ) | (10.5 | )% | $ | 141,852 | 15.7 | % | $ | 16,471 | 2.0 | % | ||||||
Inventory impairments and abandonments (I&A) | — | 109,023 | — | 110,030 | |||||||||||||||||||
Homebuilding gross profit/margin before I&A | 78,744 | 16.1 | % | 64,875 | 15.4 | % | 141,852 | 15.7 | % | 126,501 | 15.4 | % | |||||||||||
Interest amortized to cost of sales | 22,660 | 18,544 | 42,329 | 35,867 | |||||||||||||||||||
Homebuilding gross profit/margin before I&A and interest amortized to cost of sales | $ | 101,404 | 20.8 | % | $ | 83,419 | 19.8 | % | $ | 184,181 | 20.3 | % | $ | 162,368 | 19.8 | % |
Three Months Ended March 31, | Six Months Ended March 31, | LTM Ended | |||||||||||||||||||||
in thousands | 2020 | 2019 | 2020 | 2019 | 2020 | 2019 | |||||||||||||||||
Net income (loss) | $ | 10,614 | $ | (100,862 | ) | $ | 13,360 | $ | (93,551 | ) | $ | 27,391 | $ | (19,537 | ) | ||||||||
Expense (benefit) from income taxes | 4,170 | (38,168 | ) | 3,942 | (42,092 | ) | 8,789 | (56,691 | ) | ||||||||||||||
Interest amortized to home construction and land sales expenses and capitalized interest impaired | 22,660 | 32,336 | 42,329 | 49,774 | 101,496 | 106,756 | |||||||||||||||||
Interest expense not qualified for capitalization | 1,928 | 597 | 3,370 | 839 | 5,640 | 1,079 | |||||||||||||||||
EBIT | 39,372 | (106,097 | ) | 63,001 | (85,030 | ) | 143,316 | 31,607 | |||||||||||||||
Depreciation and amortization | 3,627 | 2,900 | 7,054 | 5,670 | 16,143 | 13,904 | |||||||||||||||||
EBITDA | 42,999 | (103,197 | ) | 70,055 | (79,360 | ) | 159,459 | 45,511 | |||||||||||||||
Stock-based compensation expense | 899 | 2,180 | 3,210 | 4,294 | 9,442 | 9,344 | |||||||||||||||||
(Gain) loss on extinguishment of debt | — | (216 | ) | — | (216 | ) | 25,136 | 1,719 | |||||||||||||||
Inventory impairments and abandonments (b) | — | 133,819 | — | 134,711 | — | 139,249 | |||||||||||||||||
Joint venture impairment and abandonment charges | — | — | — | — | — | 341 | |||||||||||||||||
Adjusted EBITDA | $ | 43,898 | $ | 32,586 | $ | 73,265 | $ | 59,429 | $ | 194,037 | $ | 196,164 |