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 |
99.1 | Earnings Press Release dated July 28, 2016 |
BEAZER HOMES USA, INC. | ||||||||
Date: | July 28, 2016 | By: | /s/ Kenneth F. Khoury | |||||
Kenneth F. Khoury Executive Vice President, Chief Administrative Officer and General Counsel |
Three Months Ended June 30, | ||||||||||||
2016 | 2015 | Change* | ||||||||||
New Home Orders | 1,490 | 1,524 | (2.2 | )% | ||||||||
Orders per community per month | 3.0 | 3.1 | (3.2 | )% | ||||||||
Average active community count | 166 | 164 | 1.2 | % | ||||||||
Actual community count at quarter-end | 168 | 168 | — | % | ||||||||
Cancellation rates | 19.6 | % | 19.6 | % | — | |||||||
Total Home Closings | 1,364 | 1,293 | 5.5 | % | ||||||||
Average selling price (ASP) from closings (in thousands) | $ | 330.6 | $ | 318.0 | 4.0 | % | ||||||
Homebuilding revenue (in millions) | $ | 451.0 | $ | 411.1 | 9.7 | % | ||||||
Homebuilding gross margin | 17.0 | % | 18.1 | % | -110 bps | |||||||
Homebuilding gross margin, excluding impairments and abandonments (I&A) | 19.7 | % | 18.1 | % | 160 bps | |||||||
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 24.1 | % | 21.3 | % | 280 bps | |||||||
Homebuilding gross margin, excluding I&A, interest amortized to cost of sales and additional insurance recoveries from a third-party insurer | 20.7 | % | 21.3 | % | -60 bps | |||||||
Income from continuing operations before income taxes (in millions) | $ | 11.5 | $ | 12.1 | $ | (0.6 | ) | |||||
Provision for (benefit from) income taxes (in millions) | $ | 5.3 | $ | (0.1 | ) | $ | 5.5 | |||||
Income from continuing operations (in millions) | $ | 6.1 | $ | 12.2 | $ | (6.1 | ) | |||||
Basic income per share from continuing operations | $ | 0.19 | $ | 0.46 | $ | (0.27 | ) | |||||
Diluted income per share from continuing operations | $ | 0.19 | $ | 0.38 | $ | (0.19 | ) | |||||
Total Company land and land development spending (in millions) | $ | 72.6 | $ | 105.9 | $ | (33.4 | ) | |||||
Total Company Adjusted EBITDA, excluding additional insurance recoveries from a third-party insurer (in millions) | $ | 38.3 | $ | 36.9 | 3.6 | % | ||||||
LTM Adjusted EBITDA, excluding unexpected warranty costs, a litigation settlement in discontinued operations and additional insurance recoveries from a third-party insurer (in millions) | $ | 161.4 | $ | 134.4 | 20.1 | % |
Nine Months Ended June 30, | ||||||||||||
2016 | 2015 | Change* | ||||||||||
New Home Orders | 3,951 | 4,188 | (5.7 | )% | ||||||||
LTM orders per month per community | 2.6 | 2.8 | (7.1 | )% | ||||||||
Cancellation rates | 20.4 | % | 18.9 | % | 150 bps | |||||||
Total Home Closings | 3,563 | 3,114 | 14.4 | % | ||||||||
ASP from closings (in thousands) | $ | 326.9 | $ | 307.9 | 6.2 | % | ||||||
Homebuilding revenue (in millions) | $ | 1,164.8 | $ | 959.0 | 21.5 | % | ||||||
Homebuilding gross margin | 16.6 | % | 16.9 | % | -30 bps | |||||||
Homebuilding gross margin, excluding impairments and abandonments (I&A) | 17.8 | % | 16.9 | % | 90 bps | |||||||
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 22.1 | % | 20.2 | % | 190 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 | 20.4 | % | 21.6 | % | -120 bps | |||||||
Income (loss) from continuing operations before income taxes (in millions) | $ | 8.1 | $ | (8.7 | ) | $ | 16.7 | |||||
Provision for (benefit from) income taxes (in millions) | $ | 2.1 | $ | (0.7 | ) | $ | 2.8 | |||||
Income (loss) from continuing operations (in millions) | $ | 6.0 | $ | (7.9 | ) | $ | 13.9 | |||||
Basic and diluted income (loss) per share from continuing operations | $ | 0.19 | $ | (0.30 | ) | $ | 0.49 | |||||
Total Company land and land development spending (in millions) | $ | 267.8 | $ | 353.5 | $ | (85.6 | ) | |||||
Total Company Adjusted EBITDA, excluding unexpected warranty costs, a litigation settlement in discontinued operations and additional insurance recoveries from a third-party insurer (in millions) | $ | 90.3 | $ | 73.0 | 23.8 | % |
As of June 30, | |||||||||||
2016 | 2015 | Change | |||||||||
Backlog units | 2,426 | 2,764 | (12.2 | )% | |||||||
Dollar value of backlog (in millions) | $ | 814.6 | $ | 899.2 | (9.4 | )% | |||||
ASP in backlog (in thousands) | $ | 335.8 | $ | 325.3 | 3.2 | % | |||||
Land and lots controlled | 24,317 | 27,183 | (10.5 | )% |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Total revenue | $ | 459,937 | $ | 429,438 | $ | 1,189,993 | $ | 994,561 | |||||||
Home construction and land sales expenses | 370,367 | 353,081 | 980,094 | 829,073 | |||||||||||
Inventory impairments and abandonments | 11,917 | 249 | 15,098 | 249 | |||||||||||
Gross profit | 77,653 | 76,108 | 194,801 | 165,239 | |||||||||||
Commissions | 17,500 | 17,246 | 45,856 | 40,141 | |||||||||||
General and administrative expenses | 40,457 | 37,669 | 111,024 | 101,837 | |||||||||||
Depreciation and amortization | 3,387 | 3,497 | 9,434 | 8,619 | |||||||||||
Operating income | 16,309 | 17,696 | 28,487 | 14,642 | |||||||||||
Equity in income of unconsolidated entities | 62 | 153 | 71 | 377 | |||||||||||
Gain (loss) on extinguishment of debt | 429 | — | (2,030 | ) | — | ||||||||||
Other expense, net | (5,344 | ) | (5,763 | ) | (18,467 | ) | (23,670 | ) | |||||||
Income (loss) from continuing operations before income taxes | 11,456 | 12,086 | 8,061 | (8,651 | ) | ||||||||||
Expense (benefit) from income taxes | 5,349 | (135 | ) | 2,067 | (726 | ) | |||||||||
Income (loss) from continuing operations | 6,107 | 12,221 | 5,994 | (7,925 | ) | ||||||||||
Loss from discontinued operations, net of tax | (325 | ) | (46 | ) | (447 | ) | (4,236 | ) | |||||||
Net income (loss) | $ | 5,782 | $ | 12,175 | $ | 5,547 | $ | (12,161 | ) | ||||||
Weighted average number of shares: | |||||||||||||||
Basic | 31,813 | 26,482 | 31,793 | 26,473 | |||||||||||
Diluted | 31,820 | 31,800 | 31,797 | 26,473 | |||||||||||
Basic income (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.19 | $ | 0.46 | $ | 0.19 | $ | (0.30 | ) | ||||||
Discontinued operations | $ | (0.01 | ) | $ | — | $ | (0.01 | ) | $ | (0.16 | ) | ||||
Total | $ | 0.18 | $ | 0.46 | $ | 0.18 | $ | (0.46 | ) | ||||||
Diluted income (loss) per share: | |||||||||||||||
Continuing operations | $ | 0.19 | $ | 0.38 | $ | 0.19 | $ | (0.30 | ) | ||||||
Discontinued operations | $ | (0.01 | ) | $ | — | $ | (0.01 | ) | $ | (0.16 | ) | ||||
Total | $ | 0.18 | $ | 0.38 | $ | 0.18 | $ | (0.46 | ) |
Three Months Ended | Nine Months Ended | ||||||||||||||
June 30, | June 30, | ||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||
Capitalized interest in inventory, beginning of period | $ | 140,139 | $ | 112,476 | $ | 123,457 | $ | 87,619 | |||||||
Interest incurred | 28,758 | 30,748 | 89,313 | 91,290 | |||||||||||
Capitalized interest impaired | (626 | ) | — | (710 | ) | — | |||||||||
Interest expense not qualified for capitalization and included as other expense | (5,406 | ) | (5,954 | ) | (19,471 | ) | (23,396 | ) | |||||||
Capitalized interest amortized to house construction and land sales expenses | (20,467 | ) | (13,558 | ) | (50,191 | ) | (31,801 | ) | |||||||
Capitalized interest in inventory, end of period | $ | 142,398 | $ | 123,712 | $ | 142,398 | $ | 123,712 |
June 30, 2016 | September 30, 2015 | ||||||
ASSETS | |||||||
Cash and cash equivalents | $ | 127,209 | $ | 251,583 | |||
Restricted cash | 18,846 | 38,901 | |||||
Accounts receivable (net of allowance of $866 and $1,052, respectively) | 65,905 | 52,379 | |||||
Income tax receivable | 221 | 419 | |||||
Owned Inventory | 1,731,850 | 1,697,590 | |||||
Investments in unconsolidated entities | 9,361 | 13,734 | |||||
Deferred tax assets, net | 324,763 | 325,373 | |||||
Property and equipment, net | 21,008 | 22,230 | |||||
Other assets | 19,464 | 18,994 | |||||
Total assets | $ | 2,318,627 | $ | 2,421,203 | |||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||
Trade accounts payable | $ | 109,449 | $ | 113,539 | |||
Other liabilities | 138,319 | 148,966 | |||||
Total debt (net of discounts of $4,819 and $3,639, respectively) | 1,429,483 | 1,528,275 | |||||
Total liabilities | $ | 1,677,251 | $ | 1,790,780 | |||
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, 33,083,145 issued and outstanding and 32,660,583 issued and outstanding, respectively) | 33 | 33 | |||||
Paid-in capital | 862,959 | 857,553 | |||||
Accumulated deficit | (221,616 | ) | (227,163 | ) | |||
Total stockholders’ equity | 641,376 | 630,423 | |||||
Total liabilities and stockholders’ equity | $ | 2,318,627 | $ | 2,421,203 | |||
Inventory Breakdown | |||||||
Homes under construction | $ | 520,313 | $ | 377,281 | |||
Development projects in progress | 736,587 | 809,900 | |||||
Land held for future development | 221,148 | 270,990 | |||||
Land held for sale | 38,791 | 44,555 | |||||
Capitalized interest | 142,398 | 123,457 | |||||
Model homes | 72,613 | 71,407 | |||||
Total owned inventory | $ | 1,731,850 | $ | 1,697,590 |
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||
SELECTED OPERATING DATA | 2016 | 2015 | 2016 | 2015 | ||||||||||
Closings: | ||||||||||||||
West region | 620 | 473 | 1,666 | 1,175 | ||||||||||
East region | 373 | 412 | 907 | 986 | ||||||||||
Southeast region | 371 | 408 | 990 | 953 | ||||||||||
Total closings | 1,364 | 1,293 | 3,563 | 3,114 | ||||||||||
New orders, net of cancellations: | ||||||||||||||
West region | 661 | 691 | 1,820 | 1,811 | ||||||||||
East region | 343 | 390 | 982 | 1,164 | ||||||||||
Southeast region | 486 | 443 | 1,149 | 1,213 | ||||||||||
Total new orders, net | 1,490 | 1,524 | 3,951 | 4,188 | ||||||||||
As of June 30, | ||||||||||||||
2016 | 2015 | |||||||||||||
Backlog units at end of period: | ||||||||||||||
West region | 1,109 | 1,193 | ||||||||||||
East region | 562 | 778 | ||||||||||||
Southeast region | 755 | 793 | ||||||||||||
Total backlog units | 2,426 | 2,764 | ||||||||||||
Dollar value of backlog at end of period (in millions) | $ | 814.6 | $ | 899.2 | ||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||
SUPPLEMENTAL FINANCIAL DATA | 2016 | 2015 | 2016 | 2015 | ||||||||||||
Homebuilding revenue: | ||||||||||||||||
West region | $ | 201,848 | $ | 143,328 | $ | 535,984 | $ | 338,412 | ||||||||
East region | 136,204 | 148,898 | 332,411 | 347,488 | ||||||||||||
Southeast region | 112,925 | 118,923 | 296,430 | 273,053 | ||||||||||||
Total homebuilding revenue | $ | 450,977 | $ | 411,149 | $ | 1,164,825 | $ | 958,953 | ||||||||
Revenues: | ||||||||||||||||
Homebuilding | $ | 450,977 | $ | 411,149 | $ | 1,164,825 | $ | 958,953 | ||||||||
Land sales and other | 8,960 | 18,289 | 25,168 | 35,608 | ||||||||||||
Total revenues | $ | 459,937 | $ | 429,438 | $ | 1,189,993 | $ | 994,561 | ||||||||
Gross profit: | ||||||||||||||||
Homebuilding | $ | 76,803 | $ | 74,221 | $ | 193,141 | $ | 161,877 | ||||||||
Land sales and other | 850 | 1,887 | 1,660 | 3,362 | ||||||||||||
Total gross profit | $ | 77,653 | $ | 76,108 | $ | 194,801 | $ | 165,239 |
Three Months Ended June 30, | Nine Months Ended June 30, | ||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | ||||||||||||||||||||
Homebuilding gross profit | $ | 76,803 | 17.0 | % | $ | 74,221 | 18.1 | % | $ | 193,141 | 16.6 | % | $ | 161,877 | 16.9 | % | |||||||
Inventory impairments and abandonments (I&A) | 11,899 | — | 14,512 | — | |||||||||||||||||||
Homebuilding gross profit before I&A | 88,702 | 19.7 | % | 74,221 | 18.1 | % | 207,653 | 17.8 | % | 161,877 | 16.9 | % | |||||||||||
Interest amortized to cost of sales | 20,080 | 13,548 | 49,520 | 31,524 | |||||||||||||||||||
Homebuilding gross profit before I&A and interest amortized to cost of sales | 108,782 | 24.1 | % | 87,769 | 21.3 | % | 257,173 | 22.1 | % | 193,401 | 20.2 | % | |||||||||||
Unexpected warranty costs related to Florida stucco issues (net of expected insurance recoveries) | — | — | (3,612 | ) | 13,582 | ||||||||||||||||||
Additional insurance recoveries from a third-party insurer | (15,500 | ) | — | (15,500 | ) | — | |||||||||||||||||
Homebuilding gross profit before I&A, interest amortized to cost of sales, unexpected warranty costs and additional insurance recoveries from a third-party insurer | $ | 93,282 | 20.7 | % | $ | 87,769 | 21.3 | % | $ | 238,061 | 20.4 | % | $ | 206,983 | 21.6 | % |
Three Months Ended June 30, | Nine Months Ended June 30, | LTM Ended June 30, (a) | ||||||||||||||||||||||
2016 | 2015 | 2016 | 2015 | 2016 | 2015 | |||||||||||||||||||
Net income (loss) | $ | 5,782 | $ | 12,175 | $ | 5,547 | $ | (12,161 | ) | $ | 361,802 | $ | 47,686 | |||||||||||
Provision (benefit) from income taxes | 5,168 | (137 | ) | 1,809 | (731 | ) | (323,387 | ) | (40,868 | ) | ||||||||||||||
Interest amortized to home construction and land sales expenses, capitalized interest impaired and interest expense not qualified for capitalization | 26,499 | 19,512 | 70,372 | 55,197 | 101,161 | 81,989 | ||||||||||||||||||
Depreciation and amortization and stock compensation amortization | 5,444 | 5,128 | 15,278 | 13,165 | 21,586 | 18,014 | ||||||||||||||||||
Inventory impairments and abandonments (b) | 11,291 | 249 | 14,388 | 249 | 17,248 | 5,390 | ||||||||||||||||||
(Gain) loss on debt extinguishment | (429 | ) | — | 2,030 | — | 2,110 | — | |||||||||||||||||
Adjusted EBITDA | $ | 53,755 | $ | 36,927 | $ | 109,424 | $ | 55,719 | $ | 180,520 | $ | 112,211 | ||||||||||||
Unexpected warranty costs related to Florida stucco issues (net of expected insurance recoveries) | — | — | (3,612 | ) | 13,582 | (3,612 | ) | 17,872 | ||||||||||||||||
Unexpected warranty costs related to water intrusion issues in New Jersey (net of expected insurance recoveries) | — | — | — | — | — | 648 | ||||||||||||||||||
Additional insurance recoveries from third-party insurer | (15,500 | ) | — | (15,500 | ) | — | (15,500 | ) | — | |||||||||||||||
Litigation settlement in discontinued operations | — | — | — | 3,660 | — | 3,660 | ||||||||||||||||||
Adjusted EBITDA excluding unexpected warranty costs, a litigation settlement in discontinued operations and additional insurance recoveries from a third-party insurer | $ | 38,255 | $ | 36,927 | $ | 90,312 | $ | 72,961 | $ | 161,408 | $ | 134,391 |