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Share Name | Share Symbol | Market | Type |
---|---|---|---|
Beazer Homes USA Inc New | NYSE:BZH | NYSE | Common Stock |
Price Change | % Change | Share Price | High Price | Low Price | Open Price | Shares Traded | Last Trade | |
---|---|---|---|---|---|---|---|---|
-0.73 | -2.56% | 27.75 | 28.27 | 27.65 | 27.91 | 255,599 | 22:39:55 |
Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three months ended December 31, 2023.
“Against a backdrop of declining mortgage rates in late November and early December, we generated strong first quarter results,” said Allan P. Merrill, the Company’s Chairman and Chief Executive Officer. “Driven by a higher sales pace and greater community count, net new orders grew significantly versus the prior year. With a large backlog, improving cycle times and community count growth, we’re on track to meet our growth and profitability goals for the fiscal year.”
“At the end of December, one of our title insurer providers experienced a cybersecurity incident, which delayed a number of closings in the quarter. Although the delayed closings led to slightly lower revenue and earnings in the quarter, I’m pleased to report that these delayed closings were all completed during the first two weeks of January and that the title insurance provider has returned to normal operations.”
Looking further out, Mr. Merrill concluded, “Our multi-year outlook and growth objectives remain on track, and we continue to have confidence in sustained demand for the homes we build. We have an ample lot supply to support our community count growth objectives, an accelerating number of Zero Energy Ready homes in our pipeline and a healthy balance sheet, all of which support our ability to create durable value for our stakeholders in the years ahead.”
Beazer Homes Fiscal First Quarter 2024 Highlights and Comparison to Fiscal First Quarter 2023
The following provides additional details on the Company's performance during the fiscal first quarter 2024:
Profitability. Net income from continuing operations was $21.7 million, generating diluted earnings per share of $0.70. First quarter adjusted EBITDA of $38.0 million was down $9.1 million, or 19.4%, primarily due to lower homebuilding revenue, partially offset by higher gross margin.
Orders. Net new orders for the first quarter increased to 823, up 70.7% from 482 in the prior year quarter primarily driven by a 50.4% increase in sales pace to 2.0 orders per community per month, up from 1.3 in the prior year quarter, and a 13.5% increase in average community count to 137 from 121 a year ago. The cancellation rate for the quarter was 19.0%, down from 37.1% in the prior year quarter, reflecting an improved sales environment.
Backlog. The dollar value of homes in backlog as of December 31, 2023 was $932.8 million, representing 1,791 homes, compared to $940.9 million, representing 1,740 homes, at the same time last year. The ASP of homes in backlog was $520.8 thousand, down 3.7% versus the prior year quarter.
Homebuilding Revenue. First quarter homebuilding revenue was $380.9 million, down 14.2% year-over-year. The decrease in homebuilding revenue was driven by a 10.8% decrease in home closings to 743 homes, as well as a 3.8% decrease in the ASP to $512.7 thousand. The decrease in home closings was primarily due to lower beginning backlog as well as a cybersecurity incident at one of the nation's largest title insurers. The incident was resolved following the end of the quarter, and since that time, the title insurer has resumed normal business operations.
Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 22.9% for the first quarter, up from 22.3% in the prior year quarter as a result of a decrease in build costs, partially offset by an increase in price concessions and closing cost incentives.
SG&A Expenses. Selling, general and administrative expenses as a percentage of total revenue was 14.3% for the quarter, up 200 basis points year-over-year primarily due to a decrease in revenue.
Land Position. Controlled lots increased 6.6% to 26,374, compared to 24,735 from the prior year quarter. Excluding land held for future development and land held for sale lots, active lots controlled were 25,716, up 7.3% year-over-year. As of December 31, 2023, the Company controlled 53.1% of its total active lots through option agreements compared to 54.4% as of December 31, 2022.
Liquidity. At the close of the first quarter, the Company had $404.2 million of available liquidity, including $104.2 million of unrestricted cash and $300.0 million of remaining capacity under the unsecured revolving credit facility, compared to total available liquidity of $385.7 million a year ago.
Debt Repurchases. During the quarter, the Company repurchased $4.3 million of its outstanding 6.750% unsecured Senior Notes due March 2025, bringing the outstanding balance on its 2025 Senior Notes to $197.9 million.
Senior Unsecured Revolving Credit Facility. During October 2023, the Company increased the available borrowing capacity under the senior unsecured revolving credit facility from $265.0 million to $300.0 million.
Commitment to ESG Initiatives
The Company remains committed to ensuring that by the end of 2025 every new Beazer home that we start will be Zero Energy Ready, which means it will meet the requirements of the U.S. Department of Energy’s Zero Energy Ready Home program. By the end of the first quarter, the Company had Zero Energy Ready homes under construction in every division, consisting of 54% of new home starts in the quarter. This represents a significant increase from the 28% achieved last quarter and the 2% from the prior year quarter.
During October, Beazer Homes was named the 2023 Indoor airPLUS Leader of the Year in the Builder category by the U.S. Environmental Protection Agency. This annual award recognizes market-leading organizations who promote safer, healthier, and more comfortable indoor environments by participating with Indoor airPLUS and offering enhanced indoor air quality protections for new home buyers. Beazer Homes is the first ever corporate builder to earn the honor of Indoor airPLUS Leader of the Year.
Summary results for the three months ended December 31, 2023 are as follows:
Three Months Ended December 31,
2023
2022
Change*
New home orders, net of cancellations
823
482
70.7
%
Cancellation rates
19.0
%
37.1
%
(1,810) bps
Orders per community per month
2.0
1.3
50.4
%
Average active community count
137
121
13.5
%
Active community count at quarter-end
136
119
14.3
%
Land acquisition and land development spending (in millions)
$
198.7
$
114.7
73.2
%
Total home closings
743
833
(10.8
) %
ASP from closings (in thousands)
$
512.7
$
533.1
(3.8
) %
Homebuilding revenue (in millions)
$
380.9
$
444.1
(14.2
) %
Homebuilding gross margin
19.9
%
19.2
%
70 bps
Homebuilding gross margin, excluding impairments and abandonments (I&A)
19.9
%
19.2
%
70 bps
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales
22.9
%
22.3
%
60 bps
Income from continuing operations before income taxes (in millions)
$
22.9
$
28.6
(19.8
) %
Expense from income taxes (in millions)
$
1.2
$
4.2
(71.6
) %
Income from continuing operations, net of tax (in millions)
$
21.7
$
24.4
(11.0
) %
Basic income per share from continuing operations
$
0.71
$
0.81
(12.3
) %
Diluted income per share from continuing operations
$
0.70
$
0.80
(12.5
) %
Net income (in millions)
$
21.7
$
24.3
(10.7
) %
Adjusted EBITDA (in millions)
$
38.0
$
47.1
(19.4
) %
LTM Adjusted EBITDA (in millions)
$
262.9
$
356.1
(26.2
) %
Total debt to total capitalization ratio
46.5
%
50.6
%
(410) bps
Net debt to net capitalization ratio
43.7
%
47.3
%
(360) bps
* Change and totals are calculated using unrounded numbers.
"LTM" indicates amounts for the trailing 12 months.
As of December 31,
2023
2022
Change
Backlog units
1,791
1,740
2.9
%
Dollar value of backlog (in millions)
$
932.8
$
940.9
(0.9
) %
ASP in backlog (in thousands)
$
520.8
$
540.8
(3.7
) %
Land and lots controlled
26,374
24,735
6.6
%
Conference Call
The Company will hold a conference call on February 1, 2024 at 5:00 p.m. ET to discuss these results. Interested parties may listen to the conference call and view the Company's slide presentation on the "Investor Relations" page of the Company's website, www.beazer.com. In addition, the conference call will be available by telephone at 800-475-0542 (for international callers, dial 630-395-0227). To be admitted to the call, enter the pass code “8571348". A replay of the conference call will be available, until 11:59 PM ET on February 7, 2024 at 800-234-4804 (for international callers, dial 203-369-3686) with pass code “3740”.
About Beazer Homes
Headquartered in Atlanta, Beazer Homes (NYSE: BZH) is one of the country’s largest homebuilders. Every Beazer home is designed and built to provide Surprising Performance, giving you more quality and more comfort from the moment you move in – saving you money every month. With Beazer's Choice Plans™, you can personalize your primary living areas – giving you a choice of how you want to live in the home, at no additional cost. And unlike most national homebuilders, we empower our customers to shop and compare loan options. Our Mortgage Choice program gives you the resources to easily compare multiple loan offers and choose the best lender and loan offer for you, saving you thousands over the life of your loan.
We build our homes in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia. For more information, visit beazer.com, or check out Beazer on Facebook, Instagram and Twitter.
This press release contains forward-looking statements. These forward-looking statements represent our expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, among other things:
Any forward-looking statement, including any statement expressing confidence regarding future outcomes, speaks only as of the date on which such statement is made and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time to time, and it is not possible to predict all such factors.
-Tables Follow-
BEAZER HOMES USA, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)
Three Months Ended
December 31,
in thousands (except per share data)
2023
2022
Total revenue
$
386,818
$
444,928
Home construction and land sales expenses
309,088
358,970
Inventory impairments and abandonments
—
190
Gross profit
77,730
85,768
Commissions
13,246
14,105
General and administrative expenses
41,986
40,648
Depreciation and amortization
2,233
2,513
Operating income
20,265
28,502
Loss on extinguishment of debt, net
(13
)
(515
)
Other income, net
2,657
576
Income from continuing operations before income taxes
22,909
28,563
Expense from income taxes
1,181
4,155
Income from continuing operations
21,728
24,408
Loss from discontinued operations, net of tax
—
(77
)
Net income
$
21,728
$
24,331
Weighted-average number of shares:
Basic
30,595
30,219
Diluted
30,982
30,480
Basic income per share:
Continuing operations
$
0.71
$
0.81
Discontinued operations
—
—
Total
$
0.71
$
0.81
Diluted income per share:
Continuing operations
$
0.70
$
0.80
Discontinued operations
—
—
Total
$
0.70
$
0.80
Three Months Ended
December 31,
Capitalized Interest in Inventory
2023
2022
Capitalized interest in inventory, beginning of period
$
112,580
$
109,088
Interest incurred
18,206
17,830
Capitalized interest amortized to home construction and land sales expenses
(11,190
)
(13,775
)
Capitalized interest in inventory, end of period
$
119,596
$
113,143
BEAZER HOMES USA, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(Unaudited)
in thousands (except share and per share data)
December 31, 2023
September 30, 2023
ASSETS
Cash and cash equivalents
$
104,226
$
345,590
Restricted cash
34,098
40,699
Accounts receivable (net of allowance of $284 and $284, respectively)
65,302
45,598
Income tax receivable
—
—
Owned inventory
1,953,598
1,756,203
Deferred tax assets, net
135,581
133,949
Property and equipment, net
34,455
31,144
Operating lease right-of-use assets
16,608
17,398
Goodwill
11,376
11,376
Other assets
34,207
29,076
Total assets
$
2,389,451
$
2,411,033
LIABILITIES AND STOCKHOLDERS’ EQUITY
Trade accounts payable
$
154,635
$
154,256
Operating lease liabilities
18,291
18,969
Other liabilities
120,870
156,961
Total debt (net of debt issuance costs of $5,379 and $5,759, respectively)
974,644
978,028
Total liabilities
1,268,440
1,308,214
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, 31,532,908 issued and outstanding and 31,351,434 issued and outstanding, respectively)
32
31
Paid-in capital
861,241
864,778
Retained earnings
259,738
238,010
Total stockholders’ equity
1,121,011
1,102,819
Total liabilities and stockholders’ equity
$
2,389,451
$
2,411,033
Inventory Breakdown
Homes under construction
$
766,090
$
644,363
Land under development
940,022
870,740
Land held for future development
19,879
19,879
Land held for sale
17,461
18,579
Capitalized interest
119,596
112,580
Model homes
90,550
90,062
Total owned inventory
$
1,953,598
$
1,756,203
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS
Three Months Ended December 31,
SELECTED OPERATING DATA
2023
2022
Closings:
West region
454
510
East region
136
155
Southeast region
153
168
Total closings
743
833
New orders, net of cancellations:
West region
533
248
East region
172
120
Southeast region
118
114
Total new orders, net
823
482
As of December 31,
Backlog units:
2023
2022
West region
1,112
995
East region
359
375
Southeast region
320
370
Total backlog units
1,791
1,740
Aggregate dollar value of homes in backlog (in millions)
$
932.8
$
940.9
ASP in backlog (in thousands)
$
520.8
$
540.8
in thousands
Three Months Ended December 31,
SUPPLEMENTAL FINANCIAL DATA
2023
2022
Homebuilding revenue:
West region
$
234,409
$
274,322
East region
71,753
86,031
Southeast region
74,757
83,731
Total homebuilding revenue
$
380,919
$
444,084
Revenue:
Homebuilding
$
380,919
$
444,084
Land sales and other
5,899
844
Total revenue
$
386,818
$
444,928
Gross profit:
Homebuilding
$
75,943
$
85,114
Land sales and other
1,787
654
Total gross profit
$
77,730
$
85,768
Reconciliation of homebuilding gross profit and the related gross margin excluding impairments and abandonments and interest amortized to cost of sales (each a non-GAAP financial measure) to their most directly comparable GAAP measures is provided for each period discussed below. Management believes that this information assists investors in comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective level of impairments and level of debt. These non-GAAP financial measures may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
Three Months Ended December 31,
in thousands
2023
2022
Homebuilding gross profit/margin
$
75,943
19.9
%
$
85,114
19.2
%
Inventory impairments and abandonments (I&A)
—
190
Homebuilding gross profit/margin excluding I&A
75,943
19.9
%
85,304
19.2
%
Interest amortized to cost of sales
11,190
13,775
Homebuilding gross profit/margin excluding I&A and interest amortized to cost of sales
$
87,133
22.9
%
$
99,079
22.3
%
Reconciliation of Adjusted EBITDA (a non-GAAP financial measure) to total company net income, the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing core operating results and underlying business trends by eliminating many of the differences in companies' respective capitalization, tax position, level of impairments, and other non-recurring items. This non-GAAP financial measure may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
Three Months Ended December 31,
LTM Ended December 31,(a)
in thousands
2023
2022
2023
2022
Net income
$
21,728
$
24,331
$
156,008
$
210,150
Expense from income taxes
1,181
4,133
20,984
50,940
Interest amortized to home construction and land sales expenses and capitalized interest impaired
11,190
13,775
65,904
71,053
EBIT
34,099
42,239
242,896
332,143
Depreciation and amortization
2,233
2,513
11,918
12,992
EBITDA
36,332
44,752
254,814
345,135
Stock-based compensation expense
1,673
1,580
7,368
7,950
Loss on extinguishment of debt
13
515
44
206
Inventory impairments and abandonments(b)
—
190
451
2,714
Severance expenses
—
111
224
111
Adjusted EBITDA
$
38,018
$
47,148
$
262,901
$
356,116
(a)
"LTM" indicates amounts for the trailing 12 months.
(b)
In periods during which we impaired certain of our inventory assets, capitalized interest that is impaired is included in the line above titled "Interest amortized to home construction and land sales expenses and capitalized interest impaired."
Reconciliation of net debt to net capitalization ratio (a non-GAAP financial measure) to total debt to total capitalization ratio, the most directly comparable GAAP measure, is provided for each period below. Management believes that net debt to net capitalization ratio is useful in understanding the leverage employed in our operations and as an indicator of our ability to obtain financing. This non-GAAP financial measure may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.
in thousands
As of December 31, 2023
As of December 31, 2022
Total debt
$
974,644
$
984,330
Stockholders' equity
1,121,011
962,600
Total capitalization
$
2,095,655
$
1,946,930
Total debt to total capitalization ratio
46.5
%
50.6
%
Total debt
$
974,644
$
984,330
Less: cash and cash equivalents
104,226
120,746
Net debt
870,418
863,584
Stockholders' equity
1,121,011
962,600
Net capitalization
$
1,991,429
$
1,826,184
Net debt to net capitalization ratio
43.7
%
47.3
%
View source version on businesswire.com: https://www.businesswire.com/news/home/20240201473041/en/
Beazer Homes USA, Inc. David I. Goldberg Sr. Vice President & Chief Financial Officer 770-829-3700 investor.relations@beazer.com
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