10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

_____________________________________________________________ 

FORM 10-Q

_____________________________________________________________ 

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the Quarterly Period Ended December 31, 2023

or

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT OF 1934

Commission File Number 001-12822

_____________________________________________________________ 

BEAZER HOMES USA, INC.

(Exact name of registrant as specified in its charter)

 _____________________________________________________________ 

Delaware	58-2086934
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

2002 Summit Boulevard NE, 15th Floor, Atlanta, Georgia	30319
(Address of principal executive offices)	(Zip Code)

(770) 829-3700

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

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

 _____________________________________________________________

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Sections 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for the past 90 days.    Yes  ☒    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes  ☒    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and "emerging growth company" in Rule 12b-2 of the Exchange Act:

Large accelerated filer	☐	Accelerated filer	☒	Non-accelerated filer	☐	Smaller reporting company	☐	Emerging growth company	☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes  ☐    No  ☒

Number of shares of common stock outstanding as of January 29, 2024: 31,544,911

BEAZER HOMES USA, INC.

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION	2
Item 1. Financial Statements	2
Condensed Consolidated Balance Sheets as of December 31, 2023 and September 30, 2023 (Unaudited)	2
Condensed Consolidated Statements of Operations for the three months ended December 31, 2023 and 2022 (Unaudited)	3
Condensed Consolidated Statements of Stockholders' Equity for the three months ended December 31, 2023 and 2022 (Unaudited)	4
Condensed Consolidated Statements of Cash Flows for the three months ended December 31, 2023 and 2022 (Unaudited)	5
Notes to Condensed Consolidated Financial Statements	6
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3. Quantitative and Qualitative Disclosures About Market Risk	38
Item 4. Controls and Procedures	38
Item 5. Other Information	39
PART II. OTHER INFORMATION	39
Item 1. Legal Proceedings	39
Item 1A. Risk Factors	39
Item 6. Exhibits	39
SIGNATURES	40

1

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

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
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

See accompanying notes to condensed consolidated financial statements.

2

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

See accompanying notes to condensed consolidated financial statements.

3

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

(Unaudited)

	Three Months Ended December 31, 2023
	Common Stock			Paid-in Capital		Retained Earnings
in thousands	Shares	Amount						Total
Balance as of September 30, 2023	31,351	$	31	$	864,778	$	238,010	$	1,102,819
Net income and comprehensive income	—	—		—		21,728		21,728
Stock-based compensation expense	—	—		1,673		—		1,673
Shares issued under employee stock plans, net	362	1		—		—		1
Forfeiture and other settlements of restricted stock	(8)	—		—		—		—
Common stock redeemed for tax liability	(172)	—		(5,210)		—		(5,210)
Balance as of December 31, 2023	31,533	$	32	$	861,241	$	259,738	$	1,121,011

	Three Months Ended December 31, 2022
	Common Stock			Paid-in Capital		Accumulated Deficit
in thousands	Shares	Amount						Total
Balance as of September 30, 2022	30,880	$	31	$	859,856	$	79,399	$	939,286
Net income and comprehensive income	—	—		—		24,331		24,331
Stock-based compensation expense	—	—		1,580		—		1,580
Shares issued under employee stock plans, net	672	—		—		—		—
Common stock redeemed for tax liability	(205)	—		(2,597)		—		(2,597)
Balance as of December 31, 2022	31,347	$	31	$	858,839	$	103,730	$	962,600

See accompanying notes to condensed consolidated financial statements.

4

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Three Months Ended
	December 31,
in thousands	2023		2022
Cash flows from operating activities:
Net income	$	21,728	$	24,331
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	2,233		2,513
Stock-based compensation expense	1,673		1,580
Inventory impairments and abandonments	—		190
Deferred and other income tax expense	1,181		4,133
(Gain) loss on disposal of fixed assets	(96)		1,292
Loss on extinguishment of debt, net	13		515
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	(19,704)		11,024
Decrease in income tax receivable	—		9
Increase in inventory	(196,334)		(40,489)
Decrease (increase) in other assets	2,135		(2,433)
Increase (decrease) in trade accounts payable	379		(36,817)
Decrease in other liabilities	(38,791)		(52,628)
Net cash used in operating activities	(225,583)		(86,780)
Cash flows from investing activities:
Capital expenditures	(5,544)		(3,245)
Proceeds from sale of fixed assets	96		16
Purchases of investment securities	(7,329)		—
Other	—		(2)
Net cash used in investing activities	(12,777)		(3,231)
Cash flows from financing activities:
Repayment of debt	(4,280)		—
Repayment of borrowings from credit facility	(50,000)		—
Borrowings from credit facility	50,000		—
Debt issuance costs	(115)		(2,575)
Tax payments for stock-based compensation awards	(5,210)		(2,597)
Net cash used in financing activities	(9,605)		(5,172)
Net decrease in cash, cash equivalents, and restricted cash	(247,965)		(95,183)
Cash, cash equivalents, and restricted cash at beginning of period	386,289		251,828
Cash, cash equivalents, and restricted cash at end of period	$	138,324	$	156,645

See accompanying notes to condensed consolidated financial statements.

5

BEAZER HOMES USA, INC.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

(1) Description of Business

Beazer Homes USA, Inc. (“we,” “us,” “our,” “Beazer,” “Beazer Homes” or the “Company”) is a geographically diversified homebuilder with active operations in 13 states within three geographic regions in the United States: the West, East, and Southeast.

Our homes are designed to appeal to homeowners at different price points across various demographic segments and are generally offered for sale in advance of their construction. Our objective is to provide our customers with homes that incorporate extraordinary value at an affordable price, delivered through our three strategic differentiators of Mortgage Choice, Choice Plans®, and Surprising Performance, while seeking to maximize our investment returns over the course of a housing cycle.

For an additional description of our business and strategic differentiators, refer to Item 1 within our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (2023 Annual Report).

(2) Basis of Presentation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited condensed consolidated financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. As such, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2023 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. The results of the Company's consolidated operations presented herein for the three months ended December 31, 2023 are not necessarily indicative of the results to be expected for the full fiscal year due to seasonal variations in our operations and other factors.

Basis of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Beazer Homes USA, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Our net income is equivalent to our comprehensive income, so we have not presented a separate statement of comprehensive income.

In the past, we have discontinued homebuilding operations in various markets. Results from certain of these exited markets are reported as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented.

Our fiscal year 2024 began on October 1, 2023 and ends on September 30, 2024. Our fiscal year 2023 began on October 1, 2022 and ended on September 30, 2023.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make informed estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Accordingly, actual results could differ from these estimates.

Share Repurchase Program

In May 2022, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $50.0 million of its outstanding common stock. This share repurchase program replaced the prior share repurchase program, authorized in the first quarter of fiscal 2019 of up to $50.0 million of common stock repurchases, pursuant to which $12.0 million of the capacity remained prior to the replacement of the program. No share repurchases were made during the three months ended December 31, 2023 and 2022. As of December 31, 2023, the remaining availability of the new share repurchase program was $41.8 million. The repurchase program has no expiration date. Previously repurchased shares under the program have been retired.

6

Revenue Recognition

We recognize revenue upon the transfer of promised goods to our customers in an amount that reflects the consideration to which we expect to be entitled by applying the process specified in Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers.

The following table presents our total revenue disaggregated by revenue stream:

	Three Months Ended
	December 31,
in thousands	2023		2022
Homebuilding revenue	$	380,919	$	444,084
Land sales and other revenue	5,899		844
Total revenue(a)	$	386,818	$	444,928

(a) Please see Note 14 for total revenue disaggregated by reportable segment.

Homebuilding revenue

Homebuilding revenue is reported net of discounts and is generally recognized when title to and possession of the home is transferred to the buyer at the closing date. The performance obligation to deliver the home is generally satisfied in less than one year from the original contract date.

Home sale contract assets consist of cash from home closings held by title companies in escrow for our benefit, typically for less than five days, and are considered accounts receivable. Towards the end of the quarter ended December 31, 2023, we experienced a temporary increase in our accounts receivable balance due to a cybersecurity incident at one of the nation's largest title insurers. The incident, which has been widely reported and resulted in widespread delays in home closings and transfers of closing proceeds across the country, was resolved following the end of the quarter, and since that time, the title insurer has resumed normal business operations. Accordingly, as of the date hereof, all delayed home closings experienced by us as a result of the incident have now been consummated and closing proceeds have been fully collected.

Contract liabilities include customer deposits related to sold but undelivered homes and totaled $27.0 million and $27.6 million as of December 31, 2023 and September 30, 2023, respectively. Of the customer liabilities outstanding as of September 30, 2023, $11.8 million was recognized in revenue during the three months ended December 31, 2023 upon closing of the related homes.

Land sales and other revenue

Land sales revenue relates to land that does not fit within our homebuilding programs or strategic plans. Land sales typically require cash consideration on the closing date, which is generally when performance obligations are satisfied. We also provide title examinations for our homebuyers in certain markets. Revenues associated with our title operations are recognized when closing services are rendered and title insurance policies are issued, both of which generally occur as each home is closed.

Recent Accounting Pronouncements

Segment Reporting. In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements of ASU 2023-07 are required for entities with a single reportable segment. ASU 2023-07 will be effective for our fiscal year ending September 30, 2025 and for our interim periods starting in our first quarter of fiscal 2026. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis. The Company is currently evaluating the impact that the adoption of ASU 2023-07 may have on our consolidated financial statements and disclosures.

Income Taxes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 will be effective for our fiscal year ending September 30, 2026. Early adoption is permitted and the amendments in this update should be applied on a prospective basis. The Company is currently evaluating the impact that the adoption of ASU 2023-09 may have on our consolidated financial statements and disclosures.

7

(3) Supplemental Cash Flow Information

The following table presents supplemental disclosure of non-cash and cash activity as well as a reconciliation of total cash balances between the condensed consolidated balance sheets and condensed consolidated statements of cash flows for the periods presented:

	Three Months Ended
	December 31,
in thousands	2023		2022
Supplemental disclosure of cash activity:
Interest payments	$	25,261	$	24,524
Income tax payments	$	380	$	—
Tax refunds received	$	—	$	59
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	104,226	$	120,746
Restricted cash	34,098		35,899
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	138,324	$	156,645

8

(4) Owned Inventory

The components of our owned inventory are as follows as of December 31, 2023 and September 30, 2023:

in thousands	As of December 31, 2023		As of September 30, 2023
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

Homes under construction include homes substantially finished and ready for delivery and homes in various stages of construction, including costs of the underlying lot, direct construction costs and capitalized indirect costs. As of December 31, 2023, we had 2,495 homes under construction, including 982 spec homes totaling $292.4 million (789 in-process spec homes totaling $211.7 million, and 193 finished spec homes totaling $80.7 million). As of September 30, 2023, we had 2,163 homes under construction, including 779 spec homes totaling $218.0 million (645 in-process spec homes totaling $162.0 million, and 134 finished spec units totaling $56.0 million). The increase in spec homes reflects the impact of community count growth and our decision to start more spec units given the declining mortgage interest rates and improving sales environment.

Land under development consists principally of land acquisition, land development and other common costs. These land related costs are allocated to individual lots on a pro-rata basis, and the lot costs are transferred to homes under construction when home construction begins for the respective lots. Certain of the fully developed lots in this category are reserved by a customer deposit or sales contract.

Land held for future development consists of communities for which construction and development activities are expected to occur in the future or have been idled and are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. All applicable carrying costs, such as interest and real estate taxes, are expensed as incurred.

Land held for sale includes land and lots that do not fit within our homebuilding programs and strategic plans in certain markets, and land is classified as held for sale once certain criteria are met (refer to Note 2 to the consolidated financial statements within our 2023 Annual Report). These assets are recorded at the lower of the carrying value or fair value less costs to sell (net realizable value).

The amount of interest we are able to capitalize depends on our qualified inventory balance, which considers the status of our inventory holdings. Our qualified inventory balance includes the majority of our homes under construction and land under development but excludes land held for future development and land held for sale (see Note 5 for additional information on capitalized interest).

9

Total owned inventory by reportable segment is presented in the table below as of December 31, 2023 and September 30, 2023:

in thousands	Projects in Progress(a)		Land Held for Future Development		Land Held for Sale		Total Owned Inventory
December 31, 2023
West	$	1,031,135	$	3,483	$	13,303	$	1,047,921
East	371,485		10,888		3,482		385,855
Southeast	320,127		5,508		676		326,311
Corporate and unallocated(b)	193,511		—		—		193,511
Total	$	1,916,258	$	19,879	$	17,461	$	1,953,598
September 30, 2023
West	$	914,908	$	3,483	$	14,702	$	933,093
East	325,395		10,888		3,201		339,484
Southeast	297,142		5,508		676		303,326
Corporate and unallocated(b)	180,300		—		—		180,300
Total	$	1,717,745	$	19,879	$	18,579	$	1,756,203

(a) Projects in progress include homes under construction, land under development, capitalized interest, and model home categories from the preceding table.

(b) Projects in progress amount includes capitalized interest and indirect costs that are maintained within our Corporate and unallocated segment.

Inventory Impairments

Inventory assets are assessed for recoverability periodically in accordance with the policies described in Notes 2 and 4 to the consolidated financial statements within our 2023 Annual Report.

The following table presents, by reportable segment, our total impairment and abandonment charges for the periods presented:

	Three Months Ended December 31,
in thousands	2023		2022
Abandonments:
West	$	—	$	36
East	—		154
Total abandonments charges	$	—	$	190
Total impairment and abandonment charges	$	—	$	190

Projects in Progress Impairments

Projects in progress inventory includes homes under construction and land under development grouped together as communities. Projects in progress are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable.

We assess our projects in progress inventory for indicators of impairment at the community level on a quarterly basis. If indicators of impairment are present for a community with more than ten homes remaining to close, we perform a recoverability test by comparing the expected undiscounted cash flows for the community to its carrying value. If the aggregate undiscounted cash flows are in excess of the carrying value, the asset is considered to be recoverable and is not impaired. If the carrying value exceeds the aggregate undiscounted cash flows, we perform a discounted cash flow analysis to determine the fair value of the community, and impairment charges are recorded if the fair value of the community's inventory is less than its carrying value.

No project in progress impairments were recognized during the three months ended December 31, 2023 and 2022.

10

Land Held for Sale Impairments

We evaluate the net realizable value (fair value less cost to sell) of a land held for sale asset when indicators of impairment are present. Impairments on land held for sale generally represent write downs of these properties to net realizable value based on sales contracts, letters of intent, current market conditions, and recent comparable land sale transactions, as applicable. Absent an executed sales contract, our assumptions related to land sales prices require significant judgment because the real estate market is highly sensitive to changes in economic conditions, and our estimates of sale prices could differ significantly from actual results.

No land held for sale impairments were recognized during the three months ended December 31, 2023 and 2022.

Abandonments

From time to time, we may determine to abandon lots or not exercise certain option agreements that are not projected to produce adequate results or no longer fit with our long-term strategic plan. Additionally, in certain limited instances, we are forced to abandon lots due to seller non-performance, permitting or other regulatory issues that do not allow us to build on those lots. If we intend to abandon or walk away from a property, we record an abandonment charge to earnings for the non-refundable deposit amount and any related capitalized costs in the period such decision is made.

We recognized no abandonment charges during the three months ended December 31, 2023. We recognized $0.2 million abandonment charges during the three months ended December 31, 2022. As we grow our business in the years ahead, the dollar value of abandonment charges may also grow.

Lot Option Agreements

In addition to purchasing land directly, we utilize lot option agreements that enable us to defer acquiring portions of properties owned by third parties and unconsolidated entities until we have determined whether to exercise our lot option. The majority of our lot option agreements require a non-refundable cash deposit or issuance of an irrevocable letter of credit or surety bond based on a percentage of the purchase price of the land for the right to acquire lots during a specified period at a specified price. Purchase of the properties under these agreements is contingent upon satisfaction of certain requirements by us and the sellers. Under lot option agreements, our liability is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred. If the Company cancels a lot option agreement, the cancellation would result in a write-off of the related deposits and pre-acquisition costs, but would not expose the Company to the overall risks or losses of the applicable entity we are purchasing from. We expect to exercise, subject to market conditions and seller satisfaction of contract terms, most of our remaining option agreements. Various factors, some of which are beyond our control, such as market conditions, weather conditions, and the timing of the completion of development activities, will have a significant impact on the timing of option exercises or whether lot options will be exercised at all.

The following table provides a summary of our interests in lot option agreements as of December 31, 2023 and September 30, 2023:

	As of December 31, 2023		As of September 30, 2023
in thousands
Deposits and non-refundable pre-acquisition costs incurred(a)	$	166,394	$	165,371
Remaining purchase price if lot option agreements are exercised	$	924,764	$	949,447

(a) Amount is included as a component of land under development within our owned inventory in the condensed consolidated balance sheets.

11

(5) Interest

Interest capitalized during the three months ended December 31, 2023 and 2022 was based upon the balance of inventory eligible for capitalization. The following table presents certain information regarding interest for the periods presented:

	Three Months Ended December 31,
in thousands	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(a)	(11,190)		(13,775)
Capitalized interest in inventory, end of period	$	119,596	$	113,143

(a) Capitalized interest amortized to home construction and land sales expenses varies based on the number of homes closed during the period and land sales, if any, as well as other factors.

(6) Borrowings

The Company's debt, net of unamortized debt issuance costs consisted of the following as of December 31, 2023 and September 30, 2023:

in thousands	Maturity Date	December 31, 2023		September 30, 2023
6.750% Senior Notes (2025 Notes)	March 2025	$	197,915	$	202,195
5.875% Senior Notes (2027 Notes)	October 2027	357,255		357,255
7.250% Senior Notes (2029 Notes)	October 2029	350,000		350,000
Unamortized debt issuance costs		(5,379)		(5,759)
Total Senior Notes, net		899,791		903,691
Junior Subordinated Notes (net of unamortized accretion of $25,920 and $26,436, respectively)	July 2036	74,853		74,337
Senior Unsecured Revolving Credit Facility	October 2026	—		—
Total debt, net		$	974,644	$	978,028

Senior Unsecured Revolving Credit Facility

The Senior Unsecured Revolving Credit Facility (Unsecured Facility) provides working capital and letter of credit borrowing capacity. On October 12, 2023, the Company increased its available borrowing capacity under the Unsecured Facility from $265.0 million to $300.0 million. The $300.0 million capacity includes a letter of credit facility of up to $100.0 million. The Company also will have the right from time to time to request to increase the size of the commitments under the Unsecured Facility by up to $100.0 million for a maximum of $400.0 million. The Unsecured Facility terminates on October 13, 2026 (Termination Date), and the Company may borrow, repay, and reborrow amounts under the Unsecured Facility until the Termination Date.

Obligations of the Company under the Unsecured Facility are jointly and severally guaranteed by certain of the Company’s existing and future direct and indirect subsidiaries, excluding, among others, certain specified unrestricted subsidiaries. For additional discussion of the Unsecured Facility, refer to Note 7 to the consolidated financial statements within our 2023 Annual Report.

As of December 31, 2023, no borrowings and no letters of credit were outstanding under the Unsecured Facility, resulting in a remaining capacity of $300.0 million. The Unsecured Facility requires compliance with certain covenants, including affirmative covenants, negative covenants and financial covenants. As of December 31, 2023, the Company believes it was in compliance with all such covenants.

Letter of Credit Facilities

The Company has entered into stand-alone letter of credit agreements with banks, secured with cash or certificates of deposit, to maintain pre-existing letters of credit and to provide for the issuance of new letters of credit (in addition to the letters of credit issued under the Unsecured Facility). As of December 31, 2023 and September 30, 2023, the Company had letters of credit outstanding under these additional facilities of $36.7 million and $31.2 million, respectively. The Company may enter into additional arrangements to provide additional letter of credit capacity.

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Senior Notes

The Company's senior notes (Senior Notes) are unsecured obligations ranking pari passu with all other existing and future senior indebtedness. Substantially all of the Company's significant subsidiaries are full and unconditional guarantors of the Senior Notes and are jointly and severally liable for obligations under the Senior Notes and the Unsecured Facility. Each guarantor subsidiary is a wholly owned subsidiary of Beazer Homes.

All unsecured Senior Notes rank equally in right of payment with all existing and future senior unsecured obligations, senior to all of the Company's existing and future subordinated indebtedness, and effectively subordinated to the Company's future secured indebtedness, to the extent of the value of the assets securing such indebtedness. The unsecured Senior Notes and related guarantees are structurally subordinated to all indebtedness and other liabilities of all of the Company's subsidiaries that do not guarantee these notes but are fully and unconditionally guaranteed jointly and severally on a senior basis by the Company's wholly owned subsidiaries party to each applicable indenture.

The Company's Senior Notes are issued under indentures that contain certain restrictive covenants which, among other things, restrict our ability to pay dividends, repurchase our common stock, incur certain types of additional indebtedness, and make certain investments. Compliance with the Senior Note covenants does not significantly impact the Company's operations. The Company believes it was in compliance with the covenants contained in the indentures of all of its Senior Notes as of December 31, 2023.

During the three months ended December 31, 2023, we repurchased $4.3 million of our outstanding 2025 Notes using cash on hand, resulting in a net loss on extinguishment of debt of less than $0.1 million and bringing the outstanding balance on our 2025 Notes to $197.9 million.

For additional redemption features, refer to the table below that summarizes the redemption terms of our Senior Notes:

Senior Note Description	Issuance Date	Maturity Date	Redemption Terms
6.750% Senior Notes	March 2017	March 2025	Callable at any time prior to March 15, 2020, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after March 15, 2020, callable at a redemption price equal to 105.063% of the principal amount; on or after March 15, 2021, callable at a redemption price equal to 103.375% of the principal amount; on or after March 15, 2022, callable at a redemption price equal to 101.688% of the principal amount; on or after March 15, 2023, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest.
5.875% Senior Notes	October 2017	October 2027	Callable at any time prior to October 15, 2022, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2022, callable at a redemption price equal to 102.938% of the principal amount; on or after October 15, 2023, callable at a redemption price equal to 101.958% of the principal amount; on or after October 15, 2024, callable at a redemption price equal to 100.979% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest.
7.250% Senior Notes	September 2019	October 2029	Callable at any time prior to October 15, 2024, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2024, callable at a redemption price equal to 103.625% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 102.417% of the principal amount; on or after October 15, 2026, callable at a redemption price equal to 101.208% of the principal amount; on or after October 15, 2027, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest.

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Junior Subordinated Notes

The Company's unsecured junior subordinated notes (Junior Subordinated Notes) mature on July 30, 2036 and have an aggregate principal balance of $100.8 million as of December 31, 2023. The securities have a floating interest rate as defined in the Junior Subordinated Notes Indentures, which was a weighted-average of 8.10% as of December 31, 2023. The obligations relating to these notes are subordinated to the Unsecured Facility and the Senior Notes. In January 2010, the Company restructured $75.0 million of these notes (Restructured Notes) and recorded them at their then estimated fair value. Over the remaining life of the Restructured Notes, we will increase their carrying value until this carrying value equals the face value of the notes. As of December 31, 2023, the unamortized accretion was $25.9 million and will be amortized over the remaining life of the Restructured Notes. The remaining $25.8 million of the Junior Subordinated Notes are subject to the terms of the original agreement, have a floating interest rate equal to a three-month LIBOR (on and prior to June 30, 2023) plus 2.45% per annum, or three-month SOFR (on and after July 1, 2023) plus 2.71% per annum, resetting quarterly, and are redeemable in whole or in part at par value. The material terms of the $75.0 million Restructured Notes are identical to the terms of the original agreement except that the floating interest rate is subject to a floor of 4.25% and a cap of 9.25%. In addition, beginning on June 1, 2012, the Company has the option to redeem the $75.0 million principal balance in whole or in part at 75% of par value; beginning on June 1, 2022, the redemption price increased by 1.785% annually. As of December 31, 2023, the Company believes it was in compliance with all covenants under the Junior Subordinated Notes.

(7) Operating Leases

The Company leases certain office space and equipment under operating leases for use in our operations. We recognize operating lease expense on a straight-line basis over the lease term. Certain of our lease agreements include one or more options to renew. The exercise of lease renewal options is generally at our discretion. Variable lease expense primarily relates to maintenance and other monthly expenses that do not depend on an index or rate.

We determine if an arrangement is a lease at contract inception. Lease and non-lease components are accounted for as a single component for all leases. Operating lease right to use (ROU) assets and liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term, which includes optional renewal periods if we determine it is reasonably certain that the option will be exercised. As our leases do not provide an implicit rate, the discount rate used in the present value calculation represents our incremental borrowing rate determined using information available at the commencement date.

Operating lease expense is included as a component of general and administrative expenses in our condensed consolidated statements of operations. Sublease income and variable lease expenses are de minimis. For the three months ended December 31, 2023 and 2022, operating lease expense and cash payments on lease liabilities were as follows:

	Three Months Ended December 31,
in thousands	2023		2022
Operating lease expense	$	1,081	$	1,001
Cash payments on lease liabilities	$	973	$	1,141

At December 31, 2023 and 2022, the weighted-average remaining lease term and discount rate were as follows:

	As of December 31,
	2023	2022
Weighted-average remaining lease term	6.9 years	4.3 years
Weighted-average discount rate	6.03%	4.41%

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The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of December 31, 2023:

Fiscal Years Ending September 30,
in thousands
2024(a)	$	3,156
2025	4,004
2026	3,393
2027	2,467
2028	2,212
Thereafter	7,967
Total lease payments(b)	23,199
Less: imputed interest	4,908
Total operating lease liabilities	$	18,291

(a) Remaining lease payments are for the period beginning January 1, 2024 through September 30, 2024.

(b) Lease payments exclude $3.5 million of legally binding minimum lease payments for office leases signed but not yet commenced. The related ROU asset and operating lease liability are not reflected on the Company's condensed consolidated balance sheet as of December 31, 2023.

(8) Contingencies

Beazer Homes and certain of its subsidiaries have been and continue to be named as defendants in various construction defect claims, complaints, and other legal actions. The Company is subject to the possibility of loss contingencies related to these defects as well as others arising from its business. In determining loss contingencies, we consider the likelihood of loss and our ability to reasonably estimate the amount of such loss. An estimated loss is recorded when it is considered probable that a liability has been incurred and the amount of loss can be reasonably estimated.

Warranty Reserves

We currently provide a limited warranty ranging from one to two years covering workmanship and materials per our defined quality standards. In addition, we provide a limited warranty for up to ten years covering only certain defined structural element failures.

Our homebuilding work is performed by subcontractors who typically must agree to indemnify us with regard to their work and provide certificates of insurance demonstrating that they have met our insurance requirements and have named us as an additional insured under their policies. Therefore, many claims relating to workmanship and materials that result in warranty spending are the primary responsibility of these subcontractors.

Warranty reserves are included in other liabilities within the condensed consolidated balance sheets, and the provision for warranty accruals is included in home construction expenses in the condensed consolidated statements of operations. Reserves covering anticipated warranty expenses are recorded for each home closed, which are a function of the number of home closings in the period, the selling prices of the homes closed and the rates of accrual per home estimated as a percentage of the selling price of the home. Management assesses the adequacy of warranty reserves each reporting period based on historical experience and the expected costs to remediate potential claims. Our review includes a quarterly analysis of the historical data and trends in warranty expense by division. An analysis by division allows us to consider market-specific factors such as warranty experience, the number of home closings, the selling prices of homes, product mix, and other data in estimating warranty reserves. In addition, the analysis also contemplates the existence of any non-recurring or community-specific warranty-related matters that might not be included in historical data and trends that may need to be separately estimated based on management's judgment of the ultimate cost of repair for that specific issue. While estimated warranty liabilities are adjusted each reporting period based on the results of our quarterly analyses, we may not accurately predict actual warranty costs, which could lead to significant changes in the reserve.

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In addition, we maintain third-party insurance, subject to applicable self-insured retentions, for most construction defects that we encounter in the normal course of business. We believe that our warranty and litigation accruals and third-party insurance are adequate to cover the ultimate resolution of our potential liabilities associated with known and anticipated warranty and construction defect related claims and litigation. However, there can be no assurance that the terms and limitations of the limited warranty will be effective against claims made by homebuyers; that we will be able to renew our insurance coverage or renew it at reasonable rates; that we will not be liable for damages, the cost of repairs, and/or the expense of litigation surrounding possible construction defects, soil subsidence, or building related claims; or that claims will not arise out of events or circumstances not covered by insurance and/or not subject to effective indemnification agreements with our subcontractors.

Changes in warranty reserves are as follows for the periods presented:

	Three Months Ended
	December 31,
in thousands	2023		2022
Balance at beginning of period	$	13,046	$	13,926
Warranty provision	1,904		1,603
Warranty expenditures	(2,602)		(2,370)
Balance at end of period	$	12,348	$	13,159

Insurance Recoveries

The Company has insurance policies that provide for the reimbursement of certain warranty costs incurred above specified thresholds for each period covered. Amounts recorded for anticipated insurance recoveries are reflected within the condensed consolidated statements of operations as a reduction of home construction expenses, if applicable. Amounts not yet received from our insurer are recorded on a gross basis, without any reduction for the associated warranty expense, within accounts receivable on our condensed consolidated balance sheets, if applicable.

Litigation

In the normal course of business, we and certain of our subsidiaries are subject to various lawsuits and have been named as defendants in various claims, complaints, and other legal actions, most relating to construction defects, moisture intrusion, and product liability. Certain of the liabilities resulting from these actions are covered in whole or in part by insurance.

We cannot predict or determine the timing or final outcome of these lawsuits or the effect that any adverse findings or determinations in pending lawsuits may have on us. In addition, an estimate of possible loss or range of loss, if any, cannot presently be made with respect to certain of these pending matters. An unfavorable determination in pending lawsuits could result in the payment by us of substantial monetary damages that may not be fully covered by insurance. Further, the legal costs associated with the lawsuits and the amount of time required to be spent by management and our Board of Directors on these matters, even if we are ultimately successful, could have a material adverse effect on our financial condition, results of operations, or cash flows.

We have an accrual of $9.0 million and $9.4 million in other liabilities on our condensed consolidated balance sheets related to litigation matters as of December 31, 2023 and September 30, 2023, respectively.

Surety Bonds and Letters of Credit

We had outstanding letters of credit and surety bonds of $36.7 million and $259.5 million, respectively, as of December 31, 2023, related principally to our obligations to local governments to construct roads and other improvements in various developments.

(9) Fair Value Measurements

As of the dates presented, we had assets on our condensed consolidated balance sheets that were required to be measured at fair value on a recurring or non-recurring basis. We use a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value as follows:

•Level 1 – Quoted prices in active markets for identical assets or liabilities;

•Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with market data; and

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•Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability.

Certain of our assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value of these assets may not be recoverable. We review our long-lived assets, including inventory, for recoverability when factors indicate an impairment may exist, but no less than quarterly. The fair value of assets deemed to be impaired is determined based upon the type of asset being evaluated. The fair value of our owned inventory assets, when required to be calculated, is further discussed within Note 4. Due to the substantial use of unobservable inputs in valuing the assets on a non-recurring basis, they are classified within Level 3.

Determining within which hierarchical level an asset or liability falls requires significant judgment. We evaluate our hierarchy disclosures each quarter. The following table presents the period-end balances of assets measured at fair value for each hierarchy level:

in thousands	Level 1		Level 2		Level 3		Total
As of December 31, 2023
Deferred compensation plan assets(a)	$	7,278	$	—	$	—	$	7,278
As of September 30, 2023
Deferred compensation plan assets(a)	$	6,495	$	—	$	—	$	6,495

(a) Amount is measured at fair value on a recurring basis and included in other assets within the condensed consolidated balance sheets.

The fair value of cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, other liabilities, and amounts due under the Unsecured Facility (if outstanding) approximate their carrying amounts due to the short maturity of these assets and liabilities. When outstanding, obligations related to land not owned under option agreements approximate fair value.

The following table presents the carrying value and estimated fair value of certain other financial assets and liabilities as of December 31, 2023 and September 30, 2023:

	As of December 31, 2023				As of September 30, 2023
in thousands	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets
Certificates of deposit(a)	$	9,174	$	9,185	$	1,951	$	1,986
Total financial assets	$	9,174	$	9,185	$	1,951	$	1,986
Financial liabilities(b)
Senior Notes(c)	$	899,791	$	901,776	$	903,691	$	858,528
Junior Subordinated Notes(d)	74,853		74,853		74,337		74,337
Total financial liabilities	$	974,644	$	976,629	$	978,028	$	932,865

(a) Certificates of deposit held for investment with an original maturity greater than three months are carried at original cost plus accrued interest and reported as other assets on the condensed consolidated balance sheets. The type of certificates of deposit that the Company invests in are not considered debt securities under ASC Topic 320, Investments - Debt Securities. The estimated fair value of our certificates of deposit has been determined using quoted market rates (Level 2).

(b) Carrying amounts for financial liabilities are net of unamortized debt issuance costs or accretion.

(c) The estimated fair value of our publicly-held Senior Notes has been determined using quoted market rates (Level 2).

(d) Since there is no trading market for our Junior Subordinated Notes, the fair value of these notes is estimated by discounting scheduled cash flows through maturity (Level 3). The discount rate is estimated using market rates currently being offered on loans with similar terms and credit quality. Judgment is required in interpreting market data to develop these estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange.

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(10) Income Taxes

Income Tax Provision

The Company's income tax provision for quarterly interim periods is based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent, or unusual items. We recognized income tax expense from continuing operations of $1.2 million for the three months ended December 31, 2023, compared to $4.2 million for the three months ended December 31, 2022. Income tax expense for the three months ended December 31, 2023 was primarily driven by income tax expense on earnings from continuing operations and permanent differences, partially offset by both energy efficiency tax credits generated from expected closings during the current year and the discrete tax benefits related to the generation of additional energy efficiency tax credits from homes closed in prior periods, as well as stock-based compensation activity in the period. Income tax expense for the three months ended December 31, 2022 was primarily driven by income tax expense on earnings from continuing operations, permanent differences, and the discrete tax expense related to stock-based compensation activity in the period, partially offset by the discrete tax benefits related to the generation of additional energy efficiency tax credits from homes closed in prior periods.

Deferred Tax Assets and Liabilities

The Company continues to evaluate its deferred tax assets each period to determine if a valuation allowance is required based on whether it is more likely than not that some portion of these deferred tax assets will not be realized. As of December 31, 2023, management concluded that it is more likely than not that all of our federal and certain state deferred tax assets will be realized. As part of our analysis, we considered both positive and negative factors that impact profitability and whether those factors would lead to a change in the estimate of our deferred tax assets that may be realized in the future. At this time, our conclusions on the valuation allowance and Internal Revenue Code Section 382 limitations related to our deferred tax assets remain consistent with the determinations we made during the period ended September 30, 2023, and such conclusions are based on similar company specific and industry factors to those discussed in Note 12 to the consolidated financial statements within our 2023 Annual Report.

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(11) Stock-based Compensation

Stock-based compensation expense is included in general and administrative expenses in our condensed consolidated statements of operations. Following is a summary of stock-based compensation expense related to stock options and restricted stock awards for the three months ended December 31, 2023 and 2022.

	Three Months Ended
	December 31,
in thousands	2023		2022
Stock-based compensation expense	$	1,673	$	1,580

Stock Options

Following is a summary of stock option activity for the three months ended December 31, 2023:

	Three Months Ended
	December 31, 2023
	Shares	Weighted Average Exercise Price
Outstanding at beginning of period	13,575	$	9.61
Outstanding at end of period	13,575	9.61
Exercisable at end of period	13,475	$	9.48

As of December 31, 2023 and September 30, 2023, there was less than $0.1 million of total unrecognized compensation costs related to unvested stock options, respectively.

Restricted Stock Awards

During the three months ended December 31, 2023, the Company issued time-based and performance-based restricted stock awards. The time-based restricted shares granted to our non-employee directors vest on the first anniversary of the grant, while the time-based restricted shares granted to our executive officers and other employees generally vest ratably over two to three years from the date of grant. Performance-based restricted share awards vest subject to the achievement of performance and market conditions over a three-year performance period.

Following is a summary of restricted stock activity for the three months ended December 31, 2023:

	Three Months Ended December 31, 2023
	Performance-Based Restricted Shares	Time-Based Restricted Shares	Total Restricted Shares
Beginning of period	348,223	593,834	942,057
Granted (a)	180,144	180,594	360,738
Vested	(210,176)	(318,899)	(529,075)
Forfeited	—	(8,248)	(8,248)
End of period	318,191	447,281	765,472

(a) Each of our performance shares represent a contingent right to receive one share of the Company's common stock if vesting is satisfied at the end of the three-year performance period. Our performance stock award plans provide that any performance shares earned in excess of the target number of performance shares issued may be settled in cash or additional shares at the discretion of the Compensation Committee. In November 2023, we issued 108,108 shares earned above target level based on the performance level achieved under the fiscal 2021 performance-based award plan.

As of December 31, 2023 and September 30, 2023, total unrecognized compensation costs related to unvested restricted stock awards were $12.0 million and $6.9 million, respectively. The costs remaining as of December 31, 2023 are expected to be recognized over a weighted average period of 2.13 years.

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(12) Earnings Per Share

Basic income per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted income per share adjusts the basic income per share for the effects of any potentially dilutive securities in periods in which the Company has net income and such effects are dilutive under the treasury stock method.

Following is a summary of the components of basic and diluted income per share for the periods presented:

	Three Months Ended December 31,
in thousands (except per share data)	2023		2022
Numerator:
Income from continuing operations	$	21,728	$	24,408
Loss from discontinued operations, net of tax	—		(77)
Net income	$	21,728	$	24,331
Denominator:
Basic weighted-average shares	30,595		30,219
Dilutive effect of restricted stock awards	379		257
Dilutive effect of stock options	8		4
Diluted weighted-average shares(a)	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

(a) The following potentially dilutive shares were excluded from the calculation of diluted income per share as a result of their anti-dilutive effect.

	Three Months Ended December 31,
in thousands	2023	2022
Stock options	—	13
Time-based restricted stock	68	147

(13) Other Liabilities

Other liabilities include the following as of December 31, 2023 and September 30, 2023:

in thousands	As of December 31, 2023		As of September 30, 2023
Accrued compensations and benefits	24,133		$	50,242
Customer deposits	27,018		27,577
Accrued interest	15,016		23,132
Warranty reserves	12,348		13,046
Litigation accruals	8,973		9,404
Income tax liabilities	2,705		272
Other	30,677		33,288
Total	$	120,870	$	156,961

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(14) Segment Information

We currently operate in 13 states that are grouped into three homebuilding segments based on geography. Revenues from our homebuilding segments are derived from the sale of homes that we construct, land and lot sales, and our title operations. Land sales revenue relates to land that does not fit within our homebuilding programs and strategic plans. We also provide title examinations for our homebuyers in certain markets. Our reportable segments have been determined on a basis that is used internally by management for evaluating segment performance and resource allocations. We have considered the applicable aggregation criteria and have combined our homebuilding operations into three reportable segments as follows:

West: Arizona, California, Nevada, and Texas

East: Delaware, Indiana, Maryland, New Jersey(a), Tennessee, and Virginia

Southeast: Florida, Georgia, North Carolina, and South Carolina

(a) During our fiscal 2015, we made the decision that we would not continue to reinvest in new homebuilding assets in our New Jersey division; therefore, it is no longer considered an active operation. However, it is included in this listing because the segment information below continues to include New Jersey.

Management’s evaluation of segment performance is based on segment operating income. Operating income for our homebuilding segments is defined as homebuilding and land sales and other revenue less home construction, land development, land sales expense, title operations expense, commission expense, depreciation and amortization, and certain G&A expenses that are incurred by or allocated to our homebuilding segments. The accounting policies of our segments are those described in Note 2 to the consolidated financial statements within our 2023 Annual Report.

The following tables contain our revenue, operating income, and depreciation and amortization by segment for the periods presented:

	Three Months Ended
	December 31,
in thousands	2023		2022
Revenue
West	$	237,093	$	274,815
East	74,777		86,190
Southeast	74,948		83,923
Total revenue	$	386,818	$	444,928

	Three Months Ended
	December 31,
in thousands	2023		2022
Operating income
West	$	28,339	$	37,357
East	6,356		9,262
Southeast	9,140		10,679
Segment total	43,835		57,298
Corporate and unallocated(a)	(23,570)		(28,796)
Total operating income	$	20,265	$	28,502

(a) Includes amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, when applicable, expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments reported above, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments.

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	Three Months Ended
	December 31,
in thousands	2023		2022
Depreciation and amortization
West	$	1,311	$	1,605
East	209		273
Southeast	320		330
Segment total	1,840		2,208
Corporate and unallocated(a)	393		305
Total depreciation and amortization	$	2,233	$	2,513

(a) Represents depreciation and amortization related to assets held by our corporate functions that benefit all segments.

The following table presents capital expenditures by segment for the periods presented:

	Three Months Ended
	December 31,
in thousands	2023		2022
Capital expenditures
West	$	3,600	$	1,510
East	369		533
Southeast	185		717
Corporate and unallocated	1,390		485
Total capital expenditures	$	5,544	$	3,245

The following table presents assets by segment as of December 31, 2023 and September 30, 2023:

in thousands	As of December 31, 2023		As of September 30, 2023
Assets
West	$	1,124,278	$	994,597
East	409,775		356,020
Southeast	342,053		320,430
Corporate and unallocated(a)	513,345		739,986
Total assets	$	2,389,451	$	2,411,033

(a) Primarily consists of cash and cash equivalents, restricted cash, deferred taxes, capitalized interest and indirect costs, and other items that are not allocated to the segments.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Executive Overview and Outlook

Market Conditions

As we progressed through the first quarter of fiscal 2024, demand increased as 30-year mortgage rates declined after peaking in October. This led to a sales pace of 2.0 orders per community per month for the quarter, which is within the historical normal range for the first fiscal quarter. Additionally, we delivered net new orders that exceeded our expectations.

Despite the decline in mortgage rates, home affordability remains a concern and a central risk to our industry's outcomes. Thus, we continue to adjust prices and features to align with the current market, including offering incentives. Additionally, the three strategic differentiators of our value proposition explicitly address affordability as follows: (1) our Mortgage Choice platform identifies qualified lenders and encourages multiple lenders to compete for our customer's business with the most competitive interest rates, fees, and service levels; (2) our Choice Plans® allow customers to select from a list of structural options that meets their lifestyle at no additional cost; and (3) our homes are designed to deliver Surprising Performance as they are all built to meet or exceed the latest ENERGY STAR® standards and reduce home energy costs.

As we approach the spring selling season, we are encouraged by the improved market conditions with mortgage rates declining, consumer confidence increasing, and continued low resale inventory. It is difficult to predict the long-term direction of mortgage rates, consumer confidence and the overall economy, and the corresponding impact on demand for our homes. While we expect uncertainty in near-term market conditions to persist, we remain confident that the long-term housing market outlook remains positive, supported by a demographic shift towards homeownership and a multimillion unit housing deficit that has accumulated over the past decade. Further, as supply chain conditions have continued to normalize in recent quarters, our construction cycle times have decreased, and backlog conversion rates have improved.

For the remainder of fiscal 2024, we plan to continue to position our business for longer-term growth, while focusing on the appropriate balance between pursuing growth opportunities, controlling risk, and maintaining a strong liquidity position. Our long-term strategic business objectives include increasing active communities to more than 200 by the end of fiscal 2026, reducing our net debt to net capitalization ratio to below 30% by the end of fiscal 2026, and reaching our target of 100% of home starts as Zero Energy Ready by the end of the calendar year 2025.

Overview of Results for Our Fiscal First Quarter

The following is a summary of our performance against certain key operating and financial metrics during the quarter ended December 31, 2023 and a comparison to the quarter ended December 31, 2022:

•During the quarter ended December 31, 2023, sales per community per month was 2.0 compared to 1.3 in the prior year quarter, and our net new orders were 823, up 70.7% from 482 in the prior year quarter. Cancellation rate for the quarter ended December 31, 2023 was 19.0% compared to 37.1% a year ago. In the prior year quarter, we experienced high cancellation rates and low sales pace due to sharp increases in mortgage rates at that time. Since then, our sales pace, net new orders and cancellation rates have improved significantly and returned to levels within our normal historical first quarter ranges as homebuyers have adapted to the higher rates environment. The sales pace of 2.0 orders per community per month during the fiscal first quarter reflected typical seasonality and benefited from the recent mortgage rates decline after peaking in October. The improvement in demand as mortgage rates declined speaks to the pent-up demand for homeownership.

•During the quarter ended December 31, 2023, our average active community count of 137 was up 13.5% from 121 in the prior year quarter. We plan to continue to grow community counts by increasing investments in new communities strategically in order to meet our goal of reaching more than 200 active communities by the end of 2026. We invested $198.7 million and $114.7 million in land acquisition and land development during the quarters ended December 31, 2023 and 2022, respectively.

•As of December 31, 2023, our land position included 26,374 controlled lots, up 6.6% from 24,735 as of December 31, 2022. Excluding land held for future development and land held for sale lots, we controlled 25,716 active lots, up 7.3% from the prior year. As of December 31, 2023, we had 13,648 lots, or 53.1% of our total active lots, under option agreements as compared to 13,035 lots, or 54.4% of our total active lots, under option agreements as of December 31, 2022.

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•Our Average Selling Price (ASP) for homes closed during the quarter ended December 31, 2023 was $512.7 thousand, down 3.8% from $533.1 thousand in the prior year quarter. Our closing ASP was down from the prior year quarter as anticipated, reflecting a combination of the challenging sales environment at the time the closed homes were sold, as well as our efforts to improve new home affordability by altering our product strategy in certain markets through reduction of homes sizes and/or features included in our base price. Meanwhile, our backlog ASP has remained relatively stable at $520.3 thousand, $518.0 thousand, and $520.8 thousand for the fiscal quarters ended June 30, 2023, September 30, 2023 and December 31, 2023, respectively, with a slight sequential increase in the current fiscal quarter, indicating improved market conditions.

•Homebuilding gross margin for the quarter ended December 31, 2023 was 19.9%, up from 19.2% in the prior year quarter. Homebuilding gross margin, excluding impairments, abandonments, and interest for the quarter ended December 31, 2023, was 22.9%, up from 22.3% in the prior year quarter. The increase in homebuilding gross margin compared to the prior year quarter was primarily attributed to a decrease in build costs, partially offset by an increase in price concessions and closing cost incentives.

•SG&A for the quarter ended December 31, 2023 was 14.3% of total revenue, up from 12.3% in the prior year quarter. The increase in SG&A as a percentage of total revenue was primarily due to lower revenues for the quarter ended December 31, 2023 compared to the prior year quarter. We remain focused on prudently managing overhead costs.

Seasonal and Quarterly Variability

Our homebuilding operating cycle historically has reflected escalating new order activity in the second and third fiscal quarters and increased closings in the third and fourth fiscal quarters. However, these seasonal patterns may be impacted by a variety of factors, including periods of market volatility and changes in mortgage interest rates, which may result in increased or decreased new orders and/or revenues and closings that are outside of the normal ranges typically realized on account of seasonality. Accordingly, our financial results for the three months ended December 31, 2023 may not be indicative of our full year results.

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RESULTS OF CONTINUING OPERATIONS:

The following table summarizes certain key income statement metrics for the periods presented:

	Three Months Ended
	December 31,
$ in thousands	2023			2022
Revenue:
Homebuilding	$	380,919		$	444,084
Land sales and other	5,899			844
Total	$	386,818		$	444,928
Gross profit:
Homebuilding	$	75,943		$	85,114
Land sales and other	1,787			654
Total	$	77,730		$	85,768
Gross margin:
Homebuilding(a)	19.9		%	19.2		%
Land sales and other(b)	30.3		%	77.5		%
Total	20.1		%	19.3		%
Commissions	$	13,246		$	14,105
General and administrative expenses (G&A)	$	41,986		$	40,648
SG&A (commissions plus G&A) as a percentage of total revenue	14.3		%	12.3		%
G&A as a percentage of total revenue	10.9		%	9.1		%
Depreciation and amortization	$	2,233		$	2,513
Operating income	$	20,265		$	28,502
Operating income as a percentage of total revenue	5.2		%	6.4		%
Effective tax rate(c)	5.2		%	14.5		%
Inventory impairments and abandonments	$	—		$	190
Loss on extinguishment of debt, net	$	(13)		$	(515)

(a) Excluding impairments, abandonments, and interest amortized to cost of sales, homebuilding gross margin was 22.9% and 22.3% for the three months ended December 31, 2023 and 2022, respectively. Please see "Homebuilding Gross Profit and Gross Margin" section below for a reconciliation of homebuilding gross profit and the related gross margin excluding impairments and abandonments and interest amortized to cost of sales to homebuilding gross profit and gross margin, the most directly comparable GAAP measure.

(b) Calculated as land sales and other gross profit divided by land sales and other revenue.

(c) Calculated as tax expense for the period divided by income from continuing operations. Our income tax expenses are not always directly correlated to the amount of pre-tax income for the associated period due to a variety of factors, including, but not limited to, the impact of tax credits and permanent differences. Our tax credits are predominantly due to the energy efficiency of our homes and, historically, were valued at $2,000 per single family home. The Inflation Reduction Act increased these credits to $2,500 or $5,000 per single family home meeting Energy Star or Zero Energy Ready qualifications, respectively. As we work towards our goal of building 100% Zero Energy Ready homes, we expect our energy efficiency tax credits to shift increasingly towards $5,000 per single family home in the current and future years.

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EBITDA: Reconciliation of Net Income to Adjusted EBITDA

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.

The following table reconciles our net income to Adjusted EBITDA for the periods presented:

	Three Months Ended December 31,						LTM Ended December 31,(a)
in thousands	2023		2022		23 vs 22		2023		2022		23 vs 22
Net income	$	21,728	$	24,331	$	(2,603)	$	156,008	$	210,150	$	(54,142)
Expense from income taxes	1,181		4,133		(2,952)		20,984		50,940		(29,956)
Interest amortized to home construction and land sales expenses and capitalized interest impaired	11,190		13,775		(2,585)		65,904		71,053		(5,149)
EBIT	34,099		42,239		(8,140)		242,896		332,143		(89,247)
Depreciation and amortization	2,233		2,513		(280)		11,918		12,992		(1,074)
EBITDA	36,332		44,752		(8,420)		254,814		345,135		(90,321)
Stock-based compensation expense	1,673		1,580		93		7,368		7,950		(582)
Loss on extinguishment of debt	13		515		(502)		44		206		(162)
Inventory impairments and abandonments(b)	—		190		(190)		451		2,714		(2,263)
Severance expenses	—		111		(111)		224		111		113
Adjusted EBITDA	$	38,018	$	47,148	$	(9,130)	$	262,901	$	356,116	$	(93,215)

(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 Total Debt to Total Capitalization Ratio to Net Debt to Net Capitalization Ratio

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		%

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Homebuilding Operations Data

The following table summarizes new orders and cancellation rates by reportable segment for the periods presented:

	Three Months Ended December 31,
	New Orders, net				Cancellation Rates
	2023	2022	23 vs 22		2023		2022
West	533	248	114.9	%	19.8	%	43.6	%
East	172	120	43.3	%	16.5	%	24.5	%
Southeast	118	114	3.5	%	18.6	%	31.7	%
Total	823	482	70.7	%	19.0	%	37.1	%

Net new orders for the quarter ended December 31, 2023 increased to 823, up 70.7% from the quarter ended December 31, 2022. The increase in net new orders compared to the prior year quarter was driven by a 50.4% increase in sales pace from 1.3 orders per community per month in the prior year quarter to 2.0, a 13.5% increase in average active community count from 121 in the prior year quarter to 137, and a decrease in cancellation rates from 37.1% to 19.0%. During the prior year quarter, we experienced high cancellation rates and a significant decline in sales pace due to the sharp increases in mortgage interest rates as well as other unfavorable macro-economic conditions at that time. In the current fiscal quarter, mortgage interest rates peaked in October, then declined throughout November and December. Benefiting from the mortgage interest rates decline, we experienced sequential sales pace increases with monthly sales paces of 1.7, 1.8 and 2.6 orders per community per month for the months of October, November and December, respectively.

The table below summarizes backlog units by reportable segment as well as the aggregate dollar value and ASP of homes in backlog as of December 31, 2023 and 2022:

	As of December 31,
	2023		2022		23 vs 22
Backlog Units:
West	1,112		995		11.8	%
East	359		375		(4.3)	%
Southeast	320		370		(13.5)	%
Total	1,791		1,740		2.9	%
Aggregate dollar value of homes in backlog (in millions)	$	932.8	$	940.9	(0.9)	%
ASP in backlog (in thousands)	$	520.8	$	540.8	(3.7)	%

Backlog reflects the number of homes for which the Company has entered into a sales contract with a customer but has not yet delivered the home. The aggregate dollar value of homes in backlog as of December 31, 2023 decreased 0.9% compared to December 31, 2022 due to a 3.7% decrease in the ASP of homes in backlog, partially offset by a 2.9% increase in backlog units. The increase in backlog units compared to the prior year quarter is primarily due to the increase in new net orders discussed above, partially offset by beginning the fiscal year with fewer backlog units.

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Homebuilding Revenue, Average Selling Price, and Closings

The table below summarizes homebuilding revenue, ASP of our homes closed, and closings by reportable segment for the periods presented:

	Three Months Ended December 31,
	Homebuilding Revenue						Average Selling Price						Closings
$ in thousands	2023		2022		23 vs 22		2023		2022		23 vs 22		2023	2022	23 vs 22
West	$	234,409	$	274,322	(14.5)	%	$	516.3	$	537.9	(4.0)	%	454	510	(11.0)	%
East	71,753		86,031		(16.6)	%	527.6		555.0		(4.9)	%	136	155	(12.3)	%
Southeast	74,757		83,731		(10.7)	%	488.6		498.4		(2.0)	%	153	168	(8.9)	%
Total	$	380,919	$	444,084	(14.2)	%	$	512.7	$	533.1	(3.8)	%	743	833	(10.8)	%

Three Months Ended December 31, 2023 as compared to 2022

West Segment: Homebuilding revenue decreased by 14.5% for the three months ended December 31, 2023 compared to the prior year quarter due to a 11.0% decrease in closings as well as a 4.0% decrease in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by a higher backlog conversion rate as a result of improved construction cycle times compared to the prior year quarter.

East Segment: Homebuilding revenue decreased by 16.6% for the three months ended December 31, 2023 compared to the prior year quarter due to a 12.3% decrease in closings as well as a 4.9% decrease in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by a higher backlog conversion rate as a result of improved construction cycle times compared to the prior year quarter.

Southeast Segment: Homebuilding revenue decreased by 10.7% for the three months ended December 31, 2023 compared to the prior year quarter due to a 8.9% decrease in closings as well as a 2.0% decrease in ASP. The decrease in closings was primarily due to lower beginning backlog, partially offset by a higher backlog conversion rate as a result of improved construction cycle times compared to the prior year quarter.

In addition, the decreases in closings and revenues across all three reportable segments were also impacted by a cybersecurity incident at one of the nation's largest title insurers. The incident, which has been widely reported and resulted in widespread delays in home closings and transfers of closing proceeds across the country, was resolved following the end of the quarter, and since that time, the title insurer has resumed normal business operations. Accordingly, as of the date hereof, all delayed home closings experienced by us as a result of the incident have now been consummated and closing proceeds have been fully collected.

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Homebuilding Gross Profit and Gross Margin

The following tables present our homebuilding (HB) gross profit and gross margin by reportable segment and in total. In addition, such amounts are presented excluding inventory impairments and abandonments and interest amortized to cost of sales (COS). Homebuilding gross profit is defined as homebuilding revenue less home cost of sales (which includes land and land development costs, home construction costs, capitalized interest, indirect costs of construction, estimated warranty costs, closing costs, and inventory impairments and abandonment charges).

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, 2023
$ in thousands	HB Gross Profit		HB Gross Margin		Impairments & Abandonments (I&A)		HB Gross Profit excluding I&A		HB Gross Margin excluding I&A		Interest Amortized  to COS (Interest)		HB Gross Profit excluding I&A and Interest		HB Gross  Margin excluding I&A and Interest
West	$	50,800	21.7	%	$	—	$	50,800	21.7	%	$	—	$	50,800	21.7	%
East	12,723		17.7	%	—		12,723		17.7	%	—		12,723		17.7	%
Southeast	16,738		22.4	%	—		16,738		22.4	%	—		16,738		22.4	%
Corporate & unallocated(a)	(4,318)				—		(4,318)				11,190		6,872
Total homebuilding	$	75,943	19.9	%	$	—	$	75,943	19.9	%	$	11,190	$	87,133	22.9	%
	Three Months Ended December 31, 2022
$ in thousands	HB Gross Profit		HB Gross Margin		Impairments & Abandonments (I&A)		HB Gross Profit excluding I&A		HB Gross Margin excluding I&A		Interest Amortized to COS (Interest)		HB Gross Profit excluding I&A and Interest		HB Gross  Margin excluding I&A and Interest
West	$	59,362	21.6	%	$	36	$	59,398	21.7	%	$	—	$	59,398	21.7	%
East	16,521		19.2	%	154		16,675		19.4	%	—		16,675		19.4	%
Southeast	18,501		22.1	%	—		18,501		22.1	%	—		18,501		22.1	%
Corporate & unallocated(a)	(9,270)				—		(9,270)				13,775		4,505
Total homebuilding	$	85,114	19.2	%	$	190	$	85,304	19.2	%	$	13,775	$	99,079	22.3	%

(a) Corporate and unallocated includes amortization of capitalized interest, capitalization and amortization of indirect costs related to homebuilding activities, as well as capitalized interest and capitalized indirect costs impaired in order to reflect projects in progress assets at fair value, when applicable.

Three Months Ended December 31, 2023 as compared to 2022

Our homebuilding gross profit decreased by $9.2 million to $75.9 million for the three months ended December 31, 2023, compared to $85.1 million in the prior year quarter. The decrease in homebuilding gross profit was primarily due to a decrease in homebuilding revenue of $63.2 million, partially offset by an increase in gross margin of 70 basis points to 19.9%. As shown in the tables above, the comparability of our gross profit and gross margin was slightly impacted by impairment and abandonment charges, which decreased by $0.2 million, and interest amortized to homebuilding cost of sales, which decreased by $2.6 million period-over-period (refer to Note 4 and Note 5 of the notes to the condensed consolidated financial statements in this Form 10-Q for additional details). When excluding the impact of impairment and abandonment charges and interest amortized to homebuilding cost of sales, homebuilding gross profit decreased by $11.9 million compared to the prior year quarter, while homebuilding gross margin increased by 60 basis points to 22.9%. The quarter-over-quarter increase in gross margin for the three months ended December 31, 2023 was primarily due to a decrease in build costs, lower amortization of capitalized indirect costs due to lower closings, partially offset by an increase in price concessions and closing cost incentives. Across our markets, homebuyers are using closing cost incentives largely in the form of mortgage interest rate buydowns given the elevated interest rate environment.

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West Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $8.6 million primarily due to a decrease in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, remained consistent at 21.7% with the prior year quarter, primarily driven by a decrease in build costs, offset by an increase in price concessions and closing cost incentives.

East Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $3.8 million due to lower gross margin as well as a decrease in homebuilding revenue. Homebuilding gross margin, excluding impairments and abandonments, decreased to 17.7%, down from 19.4% in the prior year quarter, primarily driven by an increase in price concessions and closing cost incentives, partially offset by changes in product and community mix.

Southeast Segment: Compared to the prior year quarter, homebuilding gross profit decreased by $1.8 million due to a decrease in homebuilding revenue, partially offset by higher gross margin. Homebuilding gross margin, excluding impairments and abandonments, increased to 22.4%, up from 22.1% in the prior year quarter, primarily driven by a decrease in build costs, partially offset by an increase in price concessions and closing cost incentives, as well as changes in product and community mix.

Measures of homebuilding gross profit and gross margin after excluding inventory impairments and abandonments, interest amortized to cost of sales, and other non-recurring items are non-GAAP financial measures. These measures should not be considered alternatives to homebuilding gross profit and gross margin determined in accordance with GAAP as an indicator of operating performance.

In particular, the magnitude and volatility of non-cash inventory impairments and abandonment charges for the Company and other homebuilders have been significant historically and, as such, have made financial analysis of our industry more difficult. Homebuilding metrics excluding these charges, as well as interest amortized to cost of sales and other similar presentations by analysts and other companies, are frequently used to assist investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective level of impairments and levels of debt. Management believes these non-GAAP measures enable holders of our securities to better understand the cash implications of our operating performance and our ability to service our debt obligations as they currently exist and as additional indebtedness is incurred in the future. These measures are also useful internally, helping management to compare operating results and to measure cash available for discretionary spending.

In a given period, our reported gross profit is generated from both communities previously impaired and communities not previously impaired. In addition, as indicated above, certain gross profit amounts arise from recoveries of prior period costs, including warranty items that are not directly tied to communities generating revenue in the period. Home closings from communities previously impaired would, in most instances, generate very low or negative gross margins prior to the impact of the previously recognized impairment. Gross margin for each home closing is higher for a particular community after an impairment because the carrying value of the underlying land was previously reduced to the present value of future cash flows as a result of the impairment, leading to lower cost of sales at the home closing. This improvement in gross margin resulting from one or more prior impairments is frequently referred to in the aggregate as the “impairment turn” or “flow-back” of impairments within the reporting period. The amount of this impairment turn may exceed the gross margin for an individual impaired asset if the gross margin for that asset prior to the impairment would have been negative. The extent to which this impairment turn is greater than the reported gross margin for the individual asset is related to the specific historical cost basis of that individual asset.

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The asset valuations that result from our impairment calculations are based on discounted cash flow analyses and are not derived by simply applying prospective gross margins to individual communities. As such, impaired communities may have gross margins that are somewhat higher or lower than the gross margins for unimpaired communities. The mix of home closings in any particular quarter varies to such an extent that comparisons between previously impaired and never impaired communities would not be a reliable way to ascertain profitability trends or to assess the accuracy of previous valuation estimates. In addition, since any amount of impairment turn is tied to individual lots in specific communities, it will vary considerably from period to period. As a result of these factors, we review the impairment turn impact on gross margin on a trailing 12-month basis rather than a quarterly basis as a way of considering whether our impairment calculations are resulting in gross margins for impaired communities that are comparable to our unimpaired communities. For the trailing 12-month period ended December 31, 2023, our homebuilding gross margin was 20.1%. Excluding interest amortized to cost of sales and inventory impairments and abandonments, our homebuilding gross margin for the trailing 12-month period ended December 31, 2023 was 21.7%. For the same trailing 12-month period, homebuilding gross margin was as follows in those communities that have previously been impaired, which represented 71 homes and 1.7% of total closings during this period:

Homebuilding Gross Margin from previously impaired communities:
Pre-impairment turn gross margin	(4.1)	%
Impact of interest amortized to COS related to these communities	2.8	%
Pre-impairment turn gross margin, excluding interest amortization	(1.3)	%
Impact of impairment turns	23.0	%
Gross margin (post impairment turns), excluding interest amortization	21.7	%

For further discussion of our impairment policies, refer to Note 4 of the notes to the condensed consolidated financial statements in this Form 10-Q.

Land Sales and Other Revenue and Gross Profit

Land sales relate to land and lots sold that do not fit within our homebuilding programs and strategic plans. We also have other revenue related to title examinations provided for our homebuyers in certain markets. The following tables summarize our land sales and other revenue and related gross profit by reportable segment for the periods presented:

	Land Sales and Other Revenue						Land Sales and Other Gross Profit
	Three Months Ended December 31,						Three Months Ended December 31,
in thousands	2023		2022		23 vs 22		2023		2022		23 vs 22
West	$	2,684	$	493	$	2,191	$	612	$	382	$	230
East	3,024		159		2,865		1,055		123		932
Southeast	191		192		(1)		120		149		(29)
Total	$	5,899	$	844	$	5,055	$	1,787	$	654	$	1,133

For the three months ended December 31, 2023, land sales and other revenue increased by $5.1 million to $5.9 million, and land sales and other gross profit increased by $1.1 million to $1.8 million compared to the prior year quarter. Period-over-period fluctuations on land sales and other revenue are primarily driven by the timing and volume of land and lot sales closings. Land sales and other gross profit is primarily impacted by the profitability of individual land and lot sale transactions. Future land and lot sales will depend on a variety of factors, including local market conditions, individual community performance, and changing strategic plans.

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Operating Income

The table below summarizes operating income by reportable segment for the periods presented:

	Three Months Ended December 31,
in thousands	2023		2022		23 vs 22
West	$	28,339	$	37,357	$	(9,018)
East	6,356		9,262		(2,906)
Southeast	9,140		10,679		(1,539)
Corporate and unallocated(a)	(23,570)		(28,796)		5,226
Operating income	$	20,265	$	28,502	$	(8,237)

(a) Includes amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, when applicable, expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments reported above, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments.

Our operating income decreased by $8.2 million to $20.3 million for the three months ended December 31, 2023, compared to operating income of $28.5 million for the three months ended December 31, 2022. This decrease was primarily due to the previously discussed decrease in gross profit and higher sales and marketing costs, partially offset by lower commissions expense on lower revenue and lower other G&A expenses during the period. SG&A as a percentage of total revenue increased by 200 basis points quarter-over-quarter, from 12.3% to 14.3%, primarily due to the decrease of homebuilding revenues.

Three Months Ended December 31, 2023 as compared to 2022

West Segment: The $9.0 million decrease in operating income compared to the prior year quarter was primarily due to the lower gross profit previously discussed and higher sales and marketing costs and other G&A expenses, partially offset by lower commissions expense on lower revenue in the segment.

East Segment: The $2.9 million decrease in operating income compared to the prior year quarter was primarily due to the lower gross profit previously discussed and higher sales and marketing costs, partially offset by lower other G&A expenses in the segment.

Southeast Segment: The $1.5 million decrease in operating income compared to the prior year quarter was primarily due to the lower gross profit previously discussed, partially offset by lower commissions expense on lower revenue, as well as lower sales and marketing costs and other G&A expenses in the segment.

Corporate and Unallocated: Our corporate and unallocated results include amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, expenses for various shared services functions that benefit all segments but are not allocated, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments. For the three months ended December 31, 2023, corporate and unallocated net expenses decreased by $5.2 million from the prior year quarter primarily due to lower amortization of capitalized interest and capitalized indirect costs to cost of sales on lower closings and homebuilding revenue.

Below operating income, we had two noteworthy quarter-over-quarter fluctuations for the three months ended December 31, 2023 compared to the prior period. Specifically, (1) we experienced an increase in other income, net, primarily attributable to a quarter-over-quarter increase in interest income due to higher interest rates on operating cash bank accounts, and (2) we recorded a loss on extinguishment of debt of $13 thousand during the current quarter as compared to $0.5 million in the prior year quarter. See Note 6 of the notes to our condensed consolidated financial statements in this Form 10-Q for a further discussion of debt.

Income Taxes

Our income tax assets and liabilities and related effective tax rate are affected by a variety of factors, including, but not limited to, tax credits, permanent differences and other discrete items. A comparison of our effective tax rates should also consider the changes in valuation allowance in periods when a change occurs. As such, our income tax expense/benefit is not always directly correlated to the amount of pre-tax income or loss for the associated periods.

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We recognized income tax expense from continuing operations of $1.2 million for the three months ended December 31, 2023, compared to $4.2 million for the three months ended December 31, 2022. Income tax expense for the three months ended December 31, 2023 was primarily driven by income tax expense on earnings from continuing operations and permanent differences, partially offset by both energy efficiency tax credits generated from expected closings during the current year and the discrete tax benefits related to the generation of additional energy efficiency tax credits from homes closed in prior periods, as well as stock-based compensation activity in the period. Income tax expense for the three months ended December 31, 2022 was primarily driven by income tax expense on earnings from continuing operations, permanent differences, and the discrete tax expense related to stock-based compensation activity in the period, partially offset by the discrete tax benefits related to the generation of additional energy efficiency tax credits from homes closed in prior periods. Refer to Note 10 of the notes to the condensed consolidated financial statements included in this Form 10-Q for further discussion of our income taxes.

Liquidity and Capital Resources

Our sources of liquidity include, but are not limited to, cash from operations, proceeds from Senior Notes, the Unsecured Facility and other bank borrowings, the issuance of equity and equity-linked securities, and other external sources of funds. Our short-term and long-term liquidity depends primarily upon our level of net income, working capital management (cash, accounts receivable, accounts payable and other liabilities), and available credit facilities.

Net changes in cash, cash equivalents, and restricted cash are as follows for the periods presented:

	Three Months Ended December 31,
in thousands	2023		2022
Net cash used in operating activities	$	(225,583)	$	(86,780)
Net cash used in investing activities	(12,777)		(3,231)
Net cash used in financing activities	(9,605)		(5,172)
Net decrease in cash, cash equivalents, and restricted cash	$	(247,965)	$	(95,183)

Operating Activities

Net cash used in operating activities was $225.6 million for the three months ended December 31, 2023. The primary drivers of operating cash flows are typically cash earnings and changes in inventory levels, including land acquisition and development spending. Net cash used in operating activities during the period was primarily driven by an increase in inventory of $196.3 million resulting from land acquisition, land development and house construction spending, and a net increase in non-inventory working capital balances of $56.0 million. This was partially offset by cash inflows from income before income taxes of $22.9 million, which included $3.8 million of non-cash charges.

Net cash used in operating activities was $86.8 million for the three months ended December 31, 2022, primarily driven by an increase in inventory of $40.5 million resulting from land acquisition, land development and house construction spending, and a net decrease in non-inventory working capital balances of $80.8 million. This was partially offset by cash inflows from income before income taxes of $28.5 million, which included $6.0 million of non-cash charges.

Investing Activities

Net cash used in investing activities was $12.8 million for the three months ended December 31, 2023, primarily driven by capital expenditures for model homes and information systems infrastructure, and purchases of investment securities.

Net cash used in investing activities for the three months ended December 31, 2022 was $3.2 million, primarily driven by capital expenditures for model homes and information systems infrastructure.

Financing Activities

Net cash used in financing activities was $9.6 million for the three months ended December 31, 2023, primarily driven by the repurchase of a portion of our 2025 Notes, debt issuance costs related to expanding the borrowing capacity of our Unsecured Facility (see Note 6), and tax payments for stock-based compensation awards vesting.

Net cash used in financing activities for the three months ended December 31, 2022 was $5.2 million primarily driven by debt issuance costs from entering into our Unsecured Facility, and tax payments for stock-based compensation awards vesting.

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Financial Position

As of December 31, 2023, our liquidity position consisted of $104.2 million in cash and cash equivalents and $300.0 million of remaining capacity under the Unsecured Facility, compared to $120.7 million in cash and cash equivalents and $265.0 million of remaining capacity under the Unsecured Facility as of December 31, 2022. Meanwhile, we invested $198.7 million and $114.7 million in land acquisition and land development during quarters ended December 31, 2023 and December 31, 2022, respectively.

While we believe we possess sufficient liquidity, we are mindful of potential short-term or seasonal requirements for enhanced liquidity that may arise to operate and grow our business. As of the date of this report, we believe we have adequate capital resources and sufficient access to external financing sources to satisfy our current and long-term liquidity needs for funds to conduct our operations and meet other needs in the ordinary course of our business, however, we are continually reviewing our capital resources to determine whether we can meet our short- and long-term goals, and we may require additional capital to do so.

At times, we may also engage in capital markets, bank loans, project debt or other financial transactions, including the repurchase of debt or potential new issuances of debt or equity securities to support our business needs. The amounts involved in these transactions, if any, may be material. In addition, as necessary or desirable, we may adjust or amend the terms of and/or expand the capacity of the Unsecured Facility, or enter into additional letter of credit facilities, or other similar facility arrangements, in each case with the same or other financial institutions, or allow any such facilities to mature or expire.

Debt

We generally fulfill our short-term cash requirements with cash generated from our operations and available borrowings. Additionally, our Unsecured Facility provides working capital and letter of credit capacity of $300.0 million. As of December 31, 2023, no borrowings and no letters of credit were outstanding under the Unsecured Facility, resulting in a remaining capacity of $300.0 million.

We have also entered into a number of stand-alone letter of credit agreements with banks, secured with cash or certificates of deposit. These combined facilities provide for letter of credit needs collateralized by either cash or assets of the Company. We currently have $36.7 million of outstanding letters of credit under these facilities.

In the future, we may from time to time seek to continue to retire or purchase our outstanding debt through cash repurchases or in exchange for other debt securities, in open market purchases, privately negotiated transactions, or otherwise. In addition, any material variance from our projected operating results could require us to obtain additional equity or debt financing. There can be no assurance that we will be able to complete any of these transactions in the future on favorable terms or at all. See Note 6 of the notes to the condensed consolidated financial statements in this Form 10-Q for additional details related to our borrowings.

Supplemental Guarantor Information

As discussed in Note 6 of the notes to the condensed consolidated financial statements in this Form 10-Q, the Company's obligations to pay principal and interest under certain debt agreements are guaranteed on a joint and several basis by substantially all of the Company's subsidiaries. Some of the immaterial subsidiaries do not guarantee the Senior Notes. The guarantees are full and unconditional. Summarized financial information is not presented for Beazer Homes USA, Inc. and the guarantor subsidiaries on a combined basis as the assets, liabilities and results of operations of the combined issuer and guarantors of the guaranteed security are not materially different than corresponding amounts presented in the condensed consolidated financial statements of the parent company.

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Credit Ratings

Our credit ratings are periodically reviewed by rating agencies. In August 2023, S&P upgraded the Company’s corporate credit rating of B to B+, updated the Company's outlook from positive to stable, and upgraded the rating for our senior unsecured notes from B to B+. In October 2023, Moody's upgraded the rating for our senior unsecured notes from B2 to B1, upgraded the Company's issuer corporate family rating from B2 to B1, and updated the Company's outlook from positive to stable. These ratings and our current credit condition affect, among other things, our ability to access new capital. These ratings are not recommendations to buy, sell or hold debt securities. Negative changes to these ratings may result in more stringent covenants and higher interest rates under the terms of any new debt. Our credit ratings could be lowered, or rating agencies could issue adverse commentaries in the future, which could have a material adverse effect on our business, financial condition, results of operations, and liquidity. In particular, a weakening of our financial condition, including any further increase in our leverage or decrease in our profitability or cash flows, could adversely affect our ability to obtain necessary funds, could result in a credit rating downgrade or change in outlook, or could otherwise increase our cost of borrowing.

Stock Repurchases and Dividends Paid

In May 2022, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $50.0 million of its outstanding common stock. This share repurchase program replaced the prior share repurchase program, authorized in the first quarter of fiscal 2019 of up to $50.0 million of common stock repurchases, pursuant to which $12.0 million of the capacity remained prior to the replacement of the program. No share repurchases were made during the three months ended December 31, 2023 or 2022. As of December 31, 2023, the remaining availability of the new share repurchase program was $41.8 million. The repurchase program has no expiration date. Previously repurchased shares under the program have been retired.

The indentures under which our Senior Notes were issued contain certain restrictive covenants, including limitations on the payment of dividends. There were no dividends paid during the three months ended December 31, 2023 or 2022.

Off-Balance Sheet Arrangements and Aggregate Contractual Commitments

Lot Option Agreements

In addition to purchasing land directly, we control a portion of our land supply through lot option agreements with land developers and land bankers, which generally require the payment of cash or issuance of an irrevocable letter of credit or surety bond for the right to acquire lots during a specified period of time at a specified price. In recent years, we have focused on increasing our lot option agreement usage to minimize risk as we grow our land position. As of December 31, 2023, we controlled 26,374 lots, which includes 272 lots of land held for future development and 386 lots of land held for sale. Of the 25,716 active lots, we controlled 13,648 of these lots, or 53.1%, through option agreements, as compared to 13,035 active lots controlled, or 54.4% of our total active lots, through option agreements as of December 31, 2022. Lot option agreements allow us to position for future growth while providing the flexibility to respond to market conditions by renegotiating the terms of the options prior to exercise or terminating the agreement.

Under option agreements, purchase of the properties is contingent upon satisfaction of certain requirements by us and the sellers, and our liability is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred, which totaled $166.4 million as of December 31, 2023. The total remaining purchase price, net of cash deposits, committed under all options was $924.8 million as of December 31, 2023. Subject to market conditions and our liquidity, we may further expand our use of option agreements to supplement our owned inventory supply.

We expect to exercise, subject to market conditions and seller satisfaction of contract terms, most of our option agreements. Various factors, some of which are beyond our control, such as market conditions, weather conditions, and the timing of the completion of development activities, will have a significant impact on the timing of option exercises or whether lot options will be exercised at all.

We have historically funded the exercise of lot options with operating cash flows. We expect these sources to continue to be adequate to fund anticipated future option exercises. Therefore, we do not anticipate that the exercise of our lot options will have a material adverse effect on our liquidity.

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Letters of Credit and Surety Bonds

In connection with the development of our communities, we are frequently required to provide performance, maintenance, and other bonds and letters of credit in support of our related obligations with respect to such developments. The amount of such obligations outstanding at any time varies in accordance with our pending development activities. In the event any such bonds or letters of credit are drawn upon, we would be obligated to reimburse the issuer of such bonds or letters of credit. We had outstanding letters of credit and surety bonds of $36.7 million and $259.5 million, respectively, as of December 31, 2023, primarily related to our obligations to local governments to construct roads and other improvements in various developments.

Critical Accounting Estimates

Our critical accounting policies require the use of judgment in their application and in certain cases require estimates of inherently uncertain matters. Although our accounting policies are in compliance with accounting principles generally accepted in the United States of America (GAAP), a change in the facts and circumstances of the underlying transactions could significantly change the application of the accounting policies and the resulting financial statement impact. It is also possible that other professionals applying reasonable judgment to the same set of facts and circumstances could reach a different conclusion. As disclosed in our 2023 Annual Report, our most critical accounting policies relate to inventory valuation of projects in progress, warranty reserves, and income tax valuation allowances. There have been no significant changes to our critical accounting policies and estimates during the three months ended December 31, 2023 as compared to those described in Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations included in our 2023 Annual Report on Form 10-K.

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FORWARD-LOOKING STATEMENTS

This Quarterly Report on Form 10-Q (Form 10-Q) contains forward-looking statements. These forward-looking statements represent our expectations or beliefs concerning future events or results, and it is possible that such events or results described in this Form 10-Q will not occur or be achieved. These forward-looking statements can generally be identified by the use of statements that include words such as "outlook," "may," "will," "strategy," "believe," "expect," "anticipate," "intend," "plan," "foresee," "likely," "goal," "target," "estimate," "project," "initial" or other similar words or phrases.

These forward-looking statements involve risks, uncertainties and other factors, many of which are outside of our control, that could cause actual events or results to differ materially from the results discussed in the forward-looking statements, including, among other things, the matters discussed in this Form 10-Q in the section captioned “Management’s Discussion and Analysis of Financial Condition and Results of Operations.” Additional information about factors that could lead to material changes is contained in Part I, Item 1A— Risk Factors of our Annual Report on Form 10-K for the fiscal year ended September 30, 2023. These factors are not intended to be an all-inclusive list of risks and uncertainties that may affect the operations, performance, development and results of our business, but instead are the risks that we currently perceive as potentially being material. Such factors may include:

•the cyclical nature of the homebuilding industry and deterioration in homebuilding industry conditions;

•other economic changes nationally and in local markets, including declines in employment levels, increases in the number of foreclosures and wage levels, each of which are outside our control and may impact consumer confidence and affect the affordability of, and demand for, the homes we sell;

•elevated mortgage interest rates for prolonged periods, as well as further increases and reduced availability of mortgage financing due to, among other factors, additional actions by the Federal Reserve to address sharp increases in inflation;

•financial institution disruptions, such as the bank failures that occurred in 2023;

•continued supply chain challenges negatively impacting our homebuilding production, including shortages of raw materials and other critical components such as windows, doors, and appliances;

•continued shortages of or increased costs for labor used in housing production, and the level of quality and craftsmanship provided by such labor;

•inaccurate estimates related to homes to be delivered in the future (backlog), as they are subject to various cancellation risks that cannot be fully controlled;

•factors affecting margins, such as adjustments to home pricing, increased sales incentives and mortgage rate buy down programs in order to remain competitive;

•decreased revenues;

•decreased land values underlying land option agreements;

•increased land development costs in communities under development or delays or difficulties in implementing initiatives to reduce our cycle times and production and overhead cost structures;

•not being able to pass on cost increases (including cost increases due to increasing the energy efficiency of our homes) through pricing increases;

•the availability and cost of land and the risks associated with the future value of our inventory;

•our ability to raise debt and/or equity capital, due to factors such as limitations in the capital markets (including market volatility), adverse credit market conditions and financial institution disruptions, and our ability to otherwise meet our ongoing liquidity needs (which could cause us to fail to meet the terms of our covenants and other requirements under our various debt instruments and therefore trigger an acceleration of a significant portion or all of our outstanding debt obligations), including the impact of any downgrades of our credit ratings or reduction in our liquidity levels;

•market perceptions regarding any capital raising initiatives we may undertake (including future issuances of equity or debt capital);

•changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes;

•increased competition or delays in reacting to changing consumer preferences in home design;

•natural disasters or other related events that could result in delays in land development or home construction, increase our costs or decrease demand in the impacted areas;

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•terrorist acts, protests and civil unrest, political uncertainty, acts of war or other factors over which the Company has no control, such as the conflict between Russia and Ukraine and the conflict in the Gaza strip;

•potential negative impacts of public health emergencies such as the COVID-19 pandemic;

•the potential recoverability of our deferred tax assets;

•increases in corporate tax rates;

•potential delays or increased costs in obtaining necessary permits as a result of changes to, or complying with, laws, regulations or governmental policies, and possible penalties for failure to comply with such laws, regulations or governmental policies, including those related to the environment;

•the results of litigation or government proceedings and fulfillment of any related obligations;

•the impact of construction defect and home warranty claims;

•the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred;

•the impact of information technology failures, cybersecurity issues or data security breaches, including cybersecurity incidents impacting third-party service providers that we depend on to conduct our business;

•the impact of governmental regulations on homebuilding in key markets, such as regulations limiting the availability of water and electricity (including availability of electrical equipment such as transformers and meters); and

•the success of our ESG initiatives, including our ability to meet our goal that by the end of 2025 every home we start will be Zero Energy Ready, as well as the success of any other related partnerships or pilot programs we may enter into in order to increase the energy efficiency of our homes and prepare for a Zero Energy Ready future.

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.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

We are exposed to a number of market risks in the ordinary course of business. Our primary market risk exposure relates to fluctuations in interest rates. We do not believe that our exposure in this area is material to our cash flows or results of operations. As of December 31, 2023, we had variable rate debt outstanding totaling approximately $74.9 million. A one percent increase in the interest rate for these notes would result in an increase of our interest expense by approximately $1.0 million over the next twelve-month period. The estimated fair value of our fixed-rate debt as of December 31, 2023 was $901.8 million, compared to a carrying amount of $899.8 million. The effect of a hypothetical one-percentage point decrease in our estimated discount rates would increase the estimated fair value of the fixed rate debt instruments from $901.8 million to $933.0 million as of December 31, 2023.

Item 4. Controls and Procedures

Disclosure Controls and Procedures

As of the end of the period covered by this report, an evaluation was performed based on criteria established in the Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) under the supervision and with the participation of the Company’s management, including the Chief Executive Officer (CEO) and Chief Financial Officer (CFO), of the effectiveness of the Company’s disclosure controls and procedures as defined in Rule 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934 (the Act). Based on that evaluation, the CEO and CFO concluded that the Company’s disclosure controls and procedures were effective as of December 31, 2023 at a reasonable assurance level.

Attached as exhibits to this Form 10-Q are certifications of our CEO and CFO, which are required by Rule 13a-14 of the Act. This Disclosure Controls and Procedures section includes information concerning management’s evaluation of disclosure controls and procedures referred to in those certifications and should be read in conjunction with the certifications of the CEO and CFO.

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Changes in Internal Control Over Financial Reporting

There have been no changes in the Company’s internal control over financial reporting during the quarter ended December 31, 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For a discussion of our legal proceedings, see Note 8 of the notes to our condensed consolidated financial statements in this Form 10-Q.

Item 1A. Risk Factors

There have been no material changes to the risk factors we previously disclosed in our Annual Report on Form 10-K for the year ended September 30, 2023.

Item 5. Other Information

Rule 10b5-1 Trading Plans

During the fiscal quarter ended December 31, 2023, none of the Company’s directors or executive officers adopted or terminated any contract, instruction or written plan for the purchase or sale of Company securities that was intended to satisfy the affirmative defense conditions of Rule 10b5-1(c) or any “non-Rule 10b5-1 trading arrangement.”

Item 6. Exhibits

10.1	Commitment Increase Activation Notice, dated October 12, 2023, by and among Beazer Homes USA, Inc., Flagstar Bank, N.A. and JPMorgan Chase Bank, N.A., as administrative agent and an issuing lender
10.2	Commitment Increase Activation Notice and New Lender Supplement, dated October 12, 2023, by and among Beazer Homes USA, Inc., Texas Capital Bank and JPMorgan Chase Bank, N.A., as administrative agent and an issuing lender
22	List of Guarantor Subsidiaries (incorporated herein by reference to Exhibit 22 of the Company's Form 10-K filed on November 10, 2021)
31.1	Certification of Chief Executive Officer pursuant to 17 CFR 240.13a-14 promulgated under Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to 17 CFR 240.13a-14 promulgated under Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	Inline XBRL Instance Document - The instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.
101.SCH	Inline XBRL Taxonomy Extension Schema Document
101.CAL	Inline XBRL Taxonomy Extension Calculation Linkbase Document
101.DEF	Inline XBRL Taxonomy Extension Definition Linkbase Document
101.LAB	Inline XBRL Taxonomy Extension Label Linkbase Document
101.PRE	Inline XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).

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SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Date:	February 1, 2024	Beazer Homes USA, Inc.
		By:		/s/ David I. Goldberg
			Name:	David I. Goldberg
				Senior Vice President and Chief Financial Officer

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EX-10.1

Exhibit 10.1

EXECUTION VERSION

COMMITMENT INCREASE ACTIVATION NOTICE

Date: October 12, 2023

To:    JPMorgan Chase Bank, N.A., as Administrative Agent
under the Credit Agreement referred to below

Reference is made to the Credit Agreement, dated as of October 13, 2022 (as amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”; unless otherwise defined herein, terms defined therein being used herein as therein defined), among BEAZER HOMES USA, INC., a Delaware corporation (the “Borrower”), the lenders or other financial institutions that are parties thereto as lenders, including the Issuing Lenders (collectively, the “Lenders”), and JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders (the “Administrative Agent”).

This notice (this “Notice”) is an activation notice referred to in Section 2.21 of the Credit Agreement, and, in accordance with such Section, the Borrower and FLAGSTAR BANK, N.A. (“Flagstar”), as applicable, hereby notify the Administrative Agent that:

1.The Borrower has requested that Flagstar increase the amount of its Commitment by $10,000,000 (the “Commitment Increase”), and, subject to the satisfaction of the Increase Conditions (as defined below), Flagstar hereby agrees to provide the Commitment Increase, effective as of the Increased Facility Closing Date specified below.

2.The Increased Facility Closing Date is October 12, 2023.

3.The agreement of Flagstar to provide the Commitment Increase is subject to the satisfaction of the following conditions precedent as of the Increased Facility Closing Date and after giving effect to the Commitment Increase (the “Increase Conditions”):

(a) no Default or Event of Default shall have occurred and be continuing;

(b) each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects; provided that, to the extent any such representation and warranty is already qualified by materiality or reference to Material Adverse Effect, such representation shall be true and correct in all respects;

(c) the Administrative Agent shall have received a certificate from the Borrower to the effect of the immediately preceding sub-clauses (a) and (b); provided that, for the avoidance of doubt, the condition set forth in this clause (c) shall be satisfied upon the Administrative Agent’s receipt of this Notice, executed and delivered by the Borrower and Flagstar;

(d)    The Administrative Agent shall have received from each of the Borrower and Flagstar a counterpart of this Notice signed on behalf of such party;

(e) the Administrative Agent shall have countersigned this Notice evidencing its consent to the delivery of this Notice less than ten (10) Business Days prior to the Increased Facility Closing Date; and

(f) the Borrower shall have paid (or caused to be paid) to Flagstar, for its own account, a commitment fee equal to $40,000.

4.In furtherance of the foregoing, the undersigned officer of the Borrower hereby certifies that (x) he is the duly elected and acting Senior Vice President and Chief Financial Officer of the Borrower and (y) in his capacity as such officer of the Borrower, and not in any individual capacity, as of the Increased Facility Closing Date and after giving effect to the Commitment Increase:

(a) no Default or Event of Default has occurred and is continuing; and

(b) each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents is true and correct in all material respects; provided that, to the extent any such representation and warranty is already qualified by materiality or reference to Material Adverse Effect, such representation is true and correct in all respects.

THIS NOTICE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

This Notice may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page hereof by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

[Signature page follows]

2

BEAZER HOMES USA, INC.

By:	/s/ David I. Goldberg
	Name: David I. Goldberg
	Title: Senior Vice President and Chief Financial Officer

FLAGSTAR BANK, N.A.

By:	/s/ Nathan Cichon
	Name: Nathan Cichon
	Title: Vice President

Accepted (and, as to paragraph 3(e) above, agreed)

as of the date first set forth above:

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent

By:	/s/ Amit Mudalier
	Name: Amit Mudalier
	Title: Vice President

EX-10.2

Exhibit 10.2

EXECUTION VERSION

COMMITMENT INCREASE ACTIVATION NOTICE

AND NEW LENDER SUPPLEMENT

Date: October 12, 2023

To:    JPMorgan Chase Bank, N.A., as Administrative Agent
under the Credit Agreement referred to below

Reference is made to the Credit Agreement, dated as of October 13, 2022 (as amended, supplemented, restated or otherwise modified from time to time, the “Credit Agreement”; unless otherwise defined herein, terms defined therein being used herein as therein defined), among BEAZER HOMES USA, INC., a Delaware corporation (the “Borrower”), the lenders or other financial institutions that are parties thereto as lenders, including the Issuing Lenders (collectively, the “Lenders”), and JPMORGAN CHASE BANK, N.A., as administrative agent for the Lenders (the “Administrative Agent”).

This notice and supplement (this “Notice”) is an activation notice and a New Lender Supplement referred to in Section 2.21 of the Credit Agreement, and, in accordance with such Section, the Borrower and TEXAS CAPITAL BANK (“Texas Cap”), as applicable, hereby notify the Administrative Agent that:

1.The Borrower has requested that Texas Cap commit to provide a Commitment Increase (as defined in the Credit Agreement) in the amount of $25,000,000 (hereinafter, the “Commitment Increase”), and, subject to the satisfaction of the Increase Conditions (as defined below), Texas Cap hereby agrees to provide the Commitment Increase, effective as of the Increased Facility Closing Date specified below.

2.The Increased Facility Closing Date is October 12, 2023.

3.The agreement of Texas Cap to provide the Commitment Increase is subject to the satisfaction of the following conditions precedent as of the Increased Facility Closing Date and after giving effect to the Commitment Increase (the “Increase Conditions”):

(a) no Default or Event of Default shall have occurred and be continuing;

(b) each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents shall be true and correct in all material respects; provided that, to the extent any such representation and warranty is already qualified by materiality or reference to Material Adverse Effect, such representation shall be true and correct in all respects;

(c) the Administrative Agent shall have received a certificate from the Borrower to the effect of the immediately preceding sub-clauses (a) and (b); provided that, for the avoidance of doubt, the condition set forth in this clause (c) shall be satisfied upon the Administrative Agent’s receipt of this Notice, executed and delivered by the Borrower and Texas Cap;

(d) the Administrative Agent shall have received from each of the Borrower, Texas Cap and each Issuing Lender (delivery of which shall evidence such Issuing Lender’s consent to the transactions described herein) a counterpart of this Notice signed on behalf of such party;

(e) the Administrative Agent shall have countersigned this Notice evidencing its consent to the transactions described herein and the delivery of this Notice less than ten (10) Business Days prior to the Increased Facility Closing Date; and

(f) the Borrower shall have paid (or caused to be paid) to Texas Cap, for its own account, a commitment fee equal to $75,000.

4.In furtherance of the foregoing, the undersigned officer of the Borrower hereby certifies that (x) he is the duly elected and acting Senior Vice President and Chief Financial Officer of the Borrower and (y) in his capacity as such officer of the Borrower, and not in any individual capacity, as of the Increased Facility Closing Date and after giving effect to the Commitment Increase:

(a) no Default or Event of Default has occurred and is continuing; and

(b) each of the representations and warranties made by any Loan Party in or pursuant to the Loan Documents is true and correct in all material respects; provided that, to the extent any such representation and warranty is already qualified by materiality or reference to Material Adverse Effect, such representation is true and correct in all respects.

5.Upon execution and delivery of this Notice by the parties hereto as provided in Section 2.21 of the Credit Agreement, Texas Cap hereby becomes a Lender thereunder having the Commitment set forth in Schedule 1 attached hereto and shall be bound by the obligations in the Credit Agreement as a Lender and entitled to the benefits of the Credit Agreement, effective as of the Increased Facility Closing Date.

THIS NEW LENDER SUPPLEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

This New Lender Supplement may be executed by one or more of the parties hereto on any number of separate counterparts, and all of said counterparts taken together shall be deemed to constitute one and the same instrument. Delivery of an executed signature page hereof by facsimile or other electronic transmission shall be effective as delivery of a manually executed counterpart hereof.

[Signature page follows]

2

BEAZER HOMES USA, INC.

By:	/s/ David I. Goldberg
	Name: David I. Goldberg
	Title: Senior Vice President and Chief Financial Officer

TEXAS CAPITAL BANK

By:	/s/ John A. Swanson
	Name: John A. Swanson
	Title: Executive Director

Accepted and agreed

as of the date first set forth above:

JPMORGAN CHASE BANK, N.A.,
as Administrative Agent and an Issuing Lender

By:	/s/ Amit Mudalier
	Name: Amit Mudalier
	Title: Vice President

REGIONS BANK, as an Issuing Lender

By:	/s/ Daniel Blazei
	Name: Daniel Blazei
	Title: Vice President

ROYAL BANK OF CANADA, as an Issuing Lender

By:	/s/ Jake Sigmund
	Name: Jake Sigmund
	Title: Authorized Signatory

[Signature Page to Commitment Increase Activation Notice and New Lender Supplement]

CREDIT SUISSE AG, NEW YORK BRANCH, as an Issuing Lender

By:	/s/ Mikhail Faybusovich
	Name: Mikhail Faybusovich
	Title: Authorized Signatory

By:	/s/ Heesu Sin
	Name: Heesu Sin
	Title: Authorized Signatory

GOLDMAN SACHS LENDING PARTNERS LLC, as an Issuing Lender

By:	/s/ Neal Osborn
	Name: Neal Osborn
	Title: Authorized Signatory

FLAGSTAR BANK, N.A., as an Issuing Lender

By:	/s/ Jerry Schillaci
	Name: Jerry Schillaci
	Title: Authorized Signatory

[Signature Page to Commitment Increase Activation Notice and New Lender Supplement]

Schedule 1

Commitment and Notice Address

1.    Name of Lender: Texas Capital Bank

2.    Notice Address:     Texas Capital Bank

        2350 Lakeside Blvd., Suite 800

        Richardson, Texas 75082

3.    Attention: Homebuilder and Community Finance

4.    Telephone: (346) 542-4887

5.    Email: John.Swanson@texascapitalbank.com

6.    Commitment: $25,000,000

EX-31.1

Exhibit 31.1

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, Allan P. Merrill, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Beazer Homes USA, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 1, 2024
/s/ Allan P. Merrill
Allan P. Merrill
President and Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

PURSUANT TO 17 CFR 240.13a-14

PROMULGATED UNDER

SECTION 302 OF THE SARBANES-OXLEY ACT OF 2002

I, David I. Goldberg, certify that:

1.I have reviewed this quarterly report on Form 10-Q of Beazer Homes USA, Inc.;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

(a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Date:	February 1, 2024
/s/ David I. Goldberg
David I. Goldberg
Senior Vice President and Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Executive Officer of Beazer Homes USA, Inc. (the “Company”) hereby certifies that the Report on Form 10-Q of the Company for the period ended December 31, 2023, accompanying this certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	February 1, 2024
/s/ Allan P. Merrill
Allan P. Merrill
President and Chief Executive Officer

The foregoing certification is being furnished solely pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and Section 1350 of Title 18, United States Code, and is not being filed as part of the report or as a separate disclosure document.

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned Chief Financial Officer of Beazer Homes USA, Inc. (the “Company”) hereby certifies that the Report on Form 10-Q of the Company for the period ended December 31, 2023, accompanying this certification, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934 and that information contained in the periodic report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:	February 1, 2024
/s/ David I. Goldberg
David I. Goldberg
Senior Vice President and Chief Financial Officer

The foregoing certification is being furnished solely pursuant to Rule 13a-14(b) under the Securities Exchange Act of 1934 and Section 1350 of Title 18, United States Code, and is not being filed as part of the report or as a separate disclosure document.

XML

Cover Page - shares	3 Months Ended
	Dec. 31, 2023	Jan. 29, 2024
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Dec. 31, 2023
Document Transition Report	false
Entity File Number	001-12822
Entity Registrant Name	BEAZER HOMES USA, INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	58-2086934
Entity Address, Address Line One	2002 Summit Boulevard NE
Entity Address, Address Line Two	15th Floor
Entity Address, City or Town	Atlanta
Entity Address, State or Province	GA
Entity Address, Postal Zip Code	30319
City Area Code	770
Local Phone Number	829-3700
Title of 12(b) Security	Common Stock, $0.001 par value
Trading Symbol	BZH
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		31,544,911
Entity Central Index Key	0000915840
Amendment Flag	false
Document Fiscal Year Focus	2024
Current Fiscal Year End Date	--09-30
Document Fiscal Period Focus	Q1

XML

CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 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
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)	0	0
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

XML

CONDENSED CONSOLIDATED BALANCE SHEETS (Parenthetical) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
ASSETS
Allowances for accounts receivable	$ 284	$ 284
LIABILITIES AND STOCKHOLDERS’ EQUITY
Unamortized debt issuance expense	$ 5,379	$ 5,759
Preferred stock, par value (in USD per share)	$ 0.01	$ 0.01
Preferred stock authorized (in shares)	5,000,000	5,000,000
Preferred stock issued (in shares)	0	0
Common stock, par value (in USD per share)	$ 0.001	$ 0.001
Common stock authorized (in shares)	63,000,000	63,000,000
Common stock issued (in shares)	31,532,908	31,351,434
Common stock outstanding (in shares)	31,532,908	31,351,434

XML

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Statement [Abstract]
Total revenue	$ 386,818	$ 444,928
Home construction and land sales expenses	309,088	358,970
Inventory impairments and abandonments	0	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	0	(77)
Net income	$ 21,728	$ 24,331
Weighted-average number of shares:
Basic (in shares)	30,595	30,219
Diluted (in shares)	30,982	30,480
Basic income per share:
Continuing operations (in USD per share)	$ 0.71	$ 0.81
Discontinued operations (in USD per share)	0	0
Total (in USD per share)	0.71	0.81
Diluted income per share:
Continuing operations (in USD per share)	0.70	0.80
Discontinued operations (in USD per share)	0	0
Total (in USD per share)	$ 0.70	$ 0.80

XML

CONDENSED CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY - USD ($) shares in Thousands, $ in Thousands	Total	Common Stock	Paid-in Capital	Retained Earnings (Accumulated Deficit)
Beginning balance (in shares) at Sep. 30, 2022		30,880
Beginning balance at Sep. 30, 2022	$ 939,286	$ 31	$ 859,856	$ 79,399
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income and comprehensive income	24,331			24,331
Stock-based compensation expense	1,580		1,580
Shares issued under employee stock plans, net (in shares)		672
Common stock redeemed for tax liability (in shares)		(205)
Common stock redeemed for tax liability	(2,597)		(2,597)
Ending balance (in shares) at Dec. 31, 2022		31,347
Ending balance at Dec. 31, 2022	962,600	$ 31	858,839	103,730
Beginning balance (in shares) at Sep. 30, 2023		31,351
Beginning balance at Sep. 30, 2023	1,102,819	$ 31	864,778	238,010
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income and comprehensive income	21,728			21,728
Stock-based compensation expense	1,673		1,673
Shares issued under employee stock plans, net (in shares)		362
Shares issued under employee stock plans, net	1	$ 1
Forfeiture and other settlements of restricted stock (in shares)		(8)
Common stock redeemed for tax liability (in shares)		(172)
Common stock redeemed for tax liability	(5,210)		(5,210)
Ending balance (in shares) at Dec. 31, 2023		31,533
Ending balance at Dec. 31, 2023	$ 1,121,011	$ 32	$ 861,241	$ 259,738

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CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Cash flows from operating activities:
Net income	$ 21,728	$ 24,331
Adjustments to reconcile net income to net cash used in operating activities:
Depreciation and amortization	2,233	2,513
Stock-based compensation expense	1,673	1,580
Inventory impairments and abandonments	0	190
Deferred and other income tax expense	1,181	4,133
(Gain) loss on disposal of fixed assets	(96)	1,292
Loss on extinguishment of debt, net	13	515
Changes in operating assets and liabilities:
(Increase) decrease in accounts receivable	(19,704)	11,024
Decrease in income tax receivable	0	9
Increase in inventory	(196,334)	(40,489)
Decrease (increase) in other assets	2,135	(2,433)
Increase (decrease) in trade accounts payable	379	(36,817)
Decrease in other liabilities	(38,791)	(52,628)
Net cash used in operating activities	(225,583)	(86,780)
Cash flows from investing activities:
Capital expenditures	(5,544)	(3,245)
Proceeds from sale of fixed assets	96	16
Purchases of investment securities	(7,329)	0
Other	0	(2)
Net cash used in investing activities	(12,777)	(3,231)
Cash flows from financing activities:
Repayment of debt	(4,280)	0
Repayment of borrowings from credit facility	(50,000)	0
Borrowings from credit facility	50,000	0
Debt issuance costs	(115)	(2,575)
Tax payments for stock-based compensation awards	(5,210)	(2,597)
Net cash used in financing activities	(9,605)	(5,172)
Net decrease in cash, cash equivalents, and restricted cash	(247,965)	(95,183)
Cash, cash equivalents, and restricted cash at beginning of period	386,289	251,828
Cash, cash equivalents, and restricted cash at end of period	$ 138,324	$ 156,645

XML

Description of Business

3 Months Ended

Dec. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Description of Business

Description of Business

Beazer Homes USA, Inc. (“we,” “us,” “our,” “Beazer,” “Beazer Homes” or the “Company”) is a geographically diversified homebuilder with active operations in 13 states within three geographic regions in the United States: the West, East, and Southeast.

Our homes are designed to appeal to homeowners at different price points across various demographic segments and are generally offered for sale in advance of their construction. Our objective is to provide our customers with homes that incorporate extraordinary value at an affordable price, delivered through our three strategic differentiators of Mortgage Choice, Choice Plans®, and Surprising Performance, while seeking to maximize our investment returns over the course of a housing cycle.

For an additional description of our business and strategic differentiators, refer to Item 1 within our Annual Report on Form 10-K for the fiscal year ended September 30, 2023 (2023 Annual Report).

XML

Basis of Presentation and Summary of Significant Accounting Policies

3 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Basis of Presentation and Summary of Significant Accounting Policies

Basis of Presentation and Summary of Significant Accounting Policies

The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited condensed consolidated financial statements do not include all of the information and disclosures required by GAAP for complete financial statements. As such, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2023 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements. The results of the Company's consolidated operations presented herein for the three months ended December 31, 2023 are not necessarily indicative of the results to be expected for the full fiscal year due to seasonal variations in our operations and other factors.

Basis of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Beazer Homes USA, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Our net income is equivalent to our comprehensive income, so we have not presented a separate statement of comprehensive income.

In the past, we have discontinued homebuilding operations in various markets. Results from certain of these exited markets are reported as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented.

Our fiscal year 2024 began on October 1, 2023 and ends on September 30, 2024. Our fiscal year 2023 began on October 1, 2022 and ended on September 30, 2023.

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make informed estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Accordingly, actual results could differ from these estimates.

Share Repurchase Program

In May 2022, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $50.0 million of its outstanding common stock. This share repurchase program replaced the prior share repurchase program, authorized in the first quarter of fiscal 2019 of up to $50.0 million of common stock repurchases, pursuant to which $12.0 million of the capacity remained prior to the replacement of the program. No share repurchases were made during the three months ended December 31, 2023 and 2022. As of December 31, 2023, the remaining availability of the new share repurchase program was $41.8 million. The repurchase program has no expiration date. Previously repurchased shares under the program have been retired.

Revenue Recognition

We recognize revenue upon the transfer of promised goods to our customers in an amount that reflects the consideration to which we expect to be entitled by applying the process specified in Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers.

The following table presents our total revenue disaggregated by revenue stream:

	Three Months Ended
	December 31,
in thousands	2023		2022
Homebuilding revenue	$	380,919	$	444,084
Land sales and other revenue	5,899		844
Total revenue(a)	$	386,818	$	444,928

(a) Please see Note 14 for total revenue disaggregated by reportable segment.

Homebuilding revenue

Homebuilding revenue is reported net of discounts and is generally recognized when title to and possession of the home is transferred to the buyer at the closing date. The performance obligation to deliver the home is generally satisfied in less than one year from the original contract date.

Home sale contract assets consist of cash from home closings held by title companies in escrow for our benefit, typically for less than five days, and are considered accounts receivable. Towards the end of the quarter ended December 31, 2023, we experienced a temporary increase in our accounts receivable balance due to a cybersecurity incident at one of the nation's largest title insurers. The incident, which has been widely reported and resulted in widespread delays in home closings and transfers of closing proceeds across the country, was resolved following the end of the quarter, and since that time, the title insurer has resumed normal business operations. Accordingly, as of the date hereof, all delayed home closings experienced by us as a result of the incident have now been consummated and closing proceeds have been fully collected.

Contract liabilities include customer deposits related to sold but undelivered homes and totaled $27.0 million and $27.6 million as of December 31, 2023 and September 30, 2023, respectively. Of the customer liabilities outstanding as of September 30, 2023, $11.8 million was recognized in revenue during the three months ended December 31, 2023 upon closing of the related homes.

Land sales and other revenue

Land sales revenue relates to land that does not fit within our homebuilding programs or strategic plans. Land sales typically require cash consideration on the closing date, which is generally when performance obligations are satisfied. We also provide title examinations for our homebuyers in certain markets. Revenues associated with our title operations are recognized when closing services are rendered and title insurance policies are issued, both of which generally occur as each home is closed.

Recent Accounting Pronouncements

Segment Reporting. In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements of ASU 2023-07 are required for entities with a single reportable segment. ASU 2023-07 will be effective for our fiscal year ending September 30, 2025 and for our interim periods starting in our first quarter of fiscal 2026. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis. The Company is currently evaluating the impact that the adoption of ASU 2023-07 may have on our consolidated financial statements and disclosures.

Income Taxes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 will be effective for our fiscal year ending September 30, 2026. Early adoption is permitted and the amendments in this update should be applied on a prospective basis. The Company is currently evaluating the impact that the adoption of ASU 2023-09 may have on our consolidated financial statements and disclosures.

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Supplemental Cash Flow Information

3 Months Ended

Dec. 31, 2023

Supplemental Cash Flow Elements [Abstract]

Supplemental Cash Flow Information

Supplemental Cash Flow Information

The following table presents supplemental disclosure of non-cash and cash activity as well as a reconciliation of total cash balances between the condensed consolidated balance sheets and condensed consolidated statements of cash flows for the periods presented:

	Three Months Ended
	December 31,
in thousands	2023		2022
Supplemental disclosure of cash activity:
Interest payments	$	25,261	$	24,524
Income tax payments	$	380	$	—
Tax refunds received	$	—	$	59
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	104,226	$	120,746
Restricted cash	34,098		35,899
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	138,324	$	156,645

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Owned Inventory

3 Months Ended

Dec. 31, 2023

Inventory Disclosure [Abstract]

Owned Inventory

Owned Inventory

The components of our owned inventory are as follows as of December 31, 2023 and September 30, 2023:

in thousands	As of December 31, 2023		As of September 30, 2023
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

Homes under construction include homes substantially finished and ready for delivery and homes in various stages of construction, including costs of the underlying lot, direct construction costs and capitalized indirect costs. As of December 31, 2023, we had 2,495 homes under construction, including 982 spec homes totaling $292.4 million (789 in-process spec homes totaling $211.7 million, and 193 finished spec homes totaling $80.7 million). As of September 30, 2023, we had 2,163 homes under construction, including 779 spec homes totaling $218.0 million (645 in-process spec homes totaling $162.0 million, and 134 finished spec units totaling $56.0 million). The increase in spec homes reflects the impact of community count growth and our decision to start more spec units given the declining mortgage interest rates and improving sales environment.

Land under development consists principally of land acquisition, land development and other common costs. These land related costs are allocated to individual lots on a pro-rata basis, and the lot costs are transferred to homes under construction when home construction begins for the respective lots. Certain of the fully developed lots in this category are reserved by a customer deposit or sales contract.

Land held for future development consists of communities for which construction and development activities are expected to occur in the future or have been idled and are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. All applicable carrying costs, such as interest and real estate taxes, are expensed as incurred.

Land held for sale includes land and lots that do not fit within our homebuilding programs and strategic plans in certain markets, and land is classified as held for sale once certain criteria are met (refer to Note 2 to the consolidated financial statements within our 2023 Annual Report). These assets are recorded at the lower of the carrying value or fair value less costs to sell (net realizable value).

The amount of interest we are able to capitalize depends on our qualified inventory balance, which considers the status of our inventory holdings. Our qualified inventory balance includes the majority of our homes under construction and land under development but excludes land held for future development and land held for sale (see Note 5 for additional information on capitalized interest).

Total owned inventory by reportable segment is presented in the table below as of December 31, 2023 and September 30, 2023:

in thousands	Projects in Progress(a)		Land Held for Future Development		Land Held for Sale		Total Owned Inventory
December 31, 2023
West	$	1,031,135	$	3,483	$	13,303	$	1,047,921
East	371,485		10,888		3,482		385,855
Southeast	320,127		5,508		676		326,311
Corporate and unallocated(b)	193,511		—		—		193,511
Total	$	1,916,258	$	19,879	$	17,461	$	1,953,598
September 30, 2023
West	$	914,908	$	3,483	$	14,702	$	933,093
East	325,395		10,888		3,201		339,484
Southeast	297,142		5,508		676		303,326
Corporate and unallocated(b)	180,300		—		—		180,300
Total	$	1,717,745	$	19,879	$	18,579	$	1,756,203

(a) Projects in progress include homes under construction, land under development, capitalized interest, and model home categories from the preceding table.

(b) Projects in progress amount includes capitalized interest and indirect costs that are maintained within our Corporate and unallocated segment.

Inventory Impairments

Inventory assets are assessed for recoverability periodically in accordance with the policies described in Notes 2 and 4 to the consolidated financial statements within our 2023 Annual Report.

The following table presents, by reportable segment, our total impairment and abandonment charges for the periods presented:

	Three Months Ended December 31,
in thousands	2023		2022
Abandonments:
West	$	—	$	36
East	—		154
Total abandonments charges	$	—	$	190
Total impairment and abandonment charges	$	—	$	190

Projects in Progress Impairments

Projects in progress inventory includes homes under construction and land under development grouped together as communities. Projects in progress are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable.

We assess our projects in progress inventory for indicators of impairment at the community level on a quarterly basis. If indicators of impairment are present for a community with more than ten homes remaining to close, we perform a recoverability test by comparing the expected undiscounted cash flows for the community to its carrying value. If the aggregate undiscounted cash flows are in excess of the carrying value, the asset is considered to be recoverable and is not impaired. If the carrying value exceeds the aggregate undiscounted cash flows, we perform a discounted cash flow analysis to determine the fair value of the community, and impairment charges are recorded if the fair value of the community's inventory is less than its carrying value.

No project in progress impairments were recognized during the three months ended December 31, 2023 and 2022.

Land Held for Sale Impairments

We evaluate the net realizable value (fair value less cost to sell) of a land held for sale asset when indicators of impairment are present. Impairments on land held for sale generally represent write downs of these properties to net realizable value based on sales contracts, letters of intent, current market conditions, and recent comparable land sale transactions, as applicable. Absent an executed sales contract, our assumptions related to land sales prices require significant judgment because the real estate market is highly sensitive to changes in economic conditions, and our estimates of sale prices could differ significantly from actual results.

No land held for sale impairments were recognized during the three months ended December 31, 2023 and 2022.

Abandonments

From time to time, we may determine to abandon lots or not exercise certain option agreements that are not projected to produce adequate results or no longer fit with our long-term strategic plan. Additionally, in certain limited instances, we are forced to abandon lots due to seller non-performance, permitting or other regulatory issues that do not allow us to build on those lots. If we intend to abandon or walk away from a property, we record an abandonment charge to earnings for the non-refundable deposit amount and any related capitalized costs in the period such decision is made.

We recognized no abandonment charges during the three months ended December 31, 2023. We recognized $0.2 million abandonment charges during the three months ended December 31, 2022. As we grow our business in the years ahead, the dollar value of abandonment charges may also grow.

Lot Option Agreements

In addition to purchasing land directly, we utilize lot option agreements that enable us to defer acquiring portions of properties owned by third parties and unconsolidated entities until we have determined whether to exercise our lot option. The majority of our lot option agreements require a non-refundable cash deposit or issuance of an irrevocable letter of credit or surety bond based on a percentage of the purchase price of the land for the right to acquire lots during a specified period at a specified price. Purchase of the properties under these agreements is contingent upon satisfaction of certain requirements by us and the sellers. Under lot option agreements, our liability is generally limited to forfeiture of the non-refundable deposits, letters of credit or surety bonds, and other non-refundable amounts incurred. If the Company cancels a lot option agreement, the cancellation would result in a write-off of the related deposits and pre-acquisition costs, but would not expose the Company to the overall risks or losses of the applicable entity we are purchasing from. We expect to exercise, subject to market conditions and seller satisfaction of contract terms, most of our remaining option agreements. Various factors, some of which are beyond our control, such as market conditions, weather conditions, and the timing of the completion of development activities, will have a significant impact on the timing of option exercises or whether lot options will be exercised at all.

The following table provides a summary of our interests in lot option agreements as of December 31, 2023 and September 30, 2023:

	As of December 31, 2023		As of September 30, 2023
in thousands
Deposits and non-refundable pre-acquisition costs incurred(a)	$	166,394	$	165,371
Remaining purchase price if lot option agreements are exercised	$	924,764	$	949,447

(a) Amount is included as a component of land under development within our owned inventory in the condensed consolidated balance sheets.

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Interest

3 Months Ended

Dec. 31, 2023

Real Estate [Abstract]

Interest

Interest

Interest capitalized during the three months ended December 31, 2023 and 2022 was based upon the balance of inventory eligible for capitalization. The following table presents certain information regarding interest for the periods presented:

	Three Months Ended December 31,
in thousands	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(a)	(11,190)		(13,775)
Capitalized interest in inventory, end of period	$	119,596	$	113,143

(a) Capitalized interest amortized to home construction and land sales expenses varies based on the number of homes closed during the period and land sales, if any, as well as other factors.

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Borrowings

3 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Borrowings

Borrowings

The Company's debt, net of unamortized debt issuance costs consisted of the following as of December 31, 2023 and September 30, 2023:

in thousands	Maturity Date	December 31, 2023		September 30, 2023
6.750% Senior Notes (2025 Notes)	March 2025	$	197,915	$	202,195
5.875% Senior Notes (2027 Notes)	October 2027	357,255		357,255
7.250% Senior Notes (2029 Notes)	October 2029	350,000		350,000
Unamortized debt issuance costs		(5,379)		(5,759)
Total Senior Notes, net		899,791		903,691
Junior Subordinated Notes (net of unamortized accretion of $25,920 and $26,436, respectively)	July 2036	74,853		74,337
Senior Unsecured Revolving Credit Facility	October 2026	—		—
Total debt, net		$	974,644	$	978,028

Senior Unsecured Revolving Credit Facility

The Senior Unsecured Revolving Credit Facility (Unsecured Facility) provides working capital and letter of credit borrowing capacity. On October 12, 2023, the Company increased its available borrowing capacity under the Unsecured Facility from $265.0 million to $300.0 million. The $300.0 million capacity includes a letter of credit facility of up to $100.0 million. The Company also will have the right from time to time to request to increase the size of the commitments under the Unsecured Facility by up to $100.0 million for a maximum of $400.0 million. The Unsecured Facility terminates on October 13, 2026 (Termination Date), and the Company may borrow, repay, and reborrow amounts under the Unsecured Facility until the Termination Date.

Obligations of the Company under the Unsecured Facility are jointly and severally guaranteed by certain of the Company’s existing and future direct and indirect subsidiaries, excluding, among others, certain specified unrestricted subsidiaries. For additional discussion of the Unsecured Facility, refer to Note 7 to the consolidated financial statements within our 2023 Annual Report.

As of December 31, 2023, no borrowings and no letters of credit were outstanding under the Unsecured Facility, resulting in a remaining capacity of $300.0 million. The Unsecured Facility requires compliance with certain covenants, including affirmative covenants, negative covenants and financial covenants. As of December 31, 2023, the Company believes it was in compliance with all such covenants.

Letter of Credit Facilities

The Company has entered into stand-alone letter of credit agreements with banks, secured with cash or certificates of deposit, to maintain pre-existing letters of credit and to provide for the issuance of new letters of credit (in addition to the letters of credit issued under the Unsecured Facility). As of December 31, 2023 and September 30, 2023, the Company had letters of credit outstanding under these additional facilities of $36.7 million and $31.2 million, respectively. The Company may enter into additional arrangements to provide additional letter of credit capacity.

Senior Notes

The Company's senior notes (Senior Notes) are unsecured obligations ranking pari passu with all other existing and future senior indebtedness. Substantially all of the Company's significant subsidiaries are full and unconditional guarantors of the Senior Notes and are jointly and severally liable for obligations under the Senior Notes and the Unsecured Facility. Each guarantor subsidiary is a wholly owned subsidiary of Beazer Homes.

All unsecured Senior Notes rank equally in right of payment with all existing and future senior unsecured obligations, senior to all of the Company's existing and future subordinated indebtedness, and effectively subordinated to the Company's future secured indebtedness, to the extent of the value of the assets securing such indebtedness. The unsecured Senior Notes and related guarantees are structurally subordinated to all indebtedness and other liabilities of all of the Company's subsidiaries that do not guarantee these notes but are fully and unconditionally guaranteed jointly and severally on a senior basis by the Company's wholly owned subsidiaries party to each applicable indenture.

The Company's Senior Notes are issued under indentures that contain certain restrictive covenants which, among other things, restrict our ability to pay dividends, repurchase our common stock, incur certain types of additional indebtedness, and make certain investments. Compliance with the Senior Note covenants does not significantly impact the Company's operations. The Company believes it was in compliance with the covenants contained in the indentures of all of its Senior Notes as of December 31, 2023.

During the three months ended December 31, 2023, we repurchased $4.3 million of our outstanding 2025 Notes using cash on hand, resulting in a net loss on extinguishment of debt of less than $0.1 million and bringing the outstanding balance on our 2025 Notes to $197.9 million.

For additional redemption features, refer to the table below that summarizes the redemption terms of our Senior Notes:

Senior Note Description	Issuance Date	Maturity Date	Redemption Terms
6.750% Senior Notes	March 2017	March 2025	Callable at any time prior to March 15, 2020, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after March 15, 2020, callable at a redemption price equal to 105.063% of the principal amount; on or after March 15, 2021, callable at a redemption price equal to 103.375% of the principal amount; on or after March 15, 2022, callable at a redemption price equal to 101.688% of the principal amount; on or after March 15, 2023, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest.
5.875% Senior Notes	October 2017	October 2027	Callable at any time prior to October 15, 2022, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2022, callable at a redemption price equal to 102.938% of the principal amount; on or after October 15, 2023, callable at a redemption price equal to 101.958% of the principal amount; on or after October 15, 2024, callable at a redemption price equal to 100.979% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest.
7.250% Senior Notes	September 2019	October 2029	Callable at any time prior to October 15, 2024, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2024, callable at a redemption price equal to 103.625% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 102.417% of the principal amount; on or after October 15, 2026, callable at a redemption price equal to 101.208% of the principal amount; on or after October 15, 2027, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest.

Junior Subordinated Notes

The Company's unsecured junior subordinated notes (Junior Subordinated Notes) mature on July 30, 2036 and have an aggregate principal balance of $100.8 million as of December 31, 2023. The securities have a floating interest rate as defined in the Junior Subordinated Notes Indentures, which was a weighted-average of 8.10% as of December 31, 2023. The obligations relating to these notes are subordinated to the Unsecured Facility and the Senior Notes. In January 2010, the Company restructured $75.0 million of these notes (Restructured Notes) and recorded them at their then estimated fair value. Over the remaining life of the Restructured Notes, we will increase their carrying value until this carrying value equals the face value of the notes. As of December 31, 2023, the unamortized accretion was $25.9 million and will be amortized over the remaining life of the Restructured Notes. The remaining $25.8 million of the Junior Subordinated Notes are subject to the terms of the original agreement, have a floating interest rate equal to a three-month LIBOR (on and prior to June 30, 2023) plus 2.45% per annum, or three-month SOFR (on and after July 1, 2023) plus 2.71% per annum, resetting quarterly, and are redeemable in whole or in part at par value. The material terms of the $75.0 million Restructured Notes are identical to the terms of the original agreement except that the floating interest rate is subject to a floor of 4.25% and a cap of 9.25%. In addition, beginning on June 1, 2012, the Company has the option to redeem the $75.0 million principal balance in whole or in part at 75% of par value; beginning on June 1, 2022, the redemption price increased by 1.785% annually. As of December 31, 2023, the Company believes it was in compliance with all covenants under the Junior Subordinated Notes.

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Operating Leases

3 Months Ended

Dec. 31, 2023

Leases [Abstract]

Operating Leases

Operating Leases

The Company leases certain office space and equipment under operating leases for use in our operations. We recognize operating lease expense on a straight-line basis over the lease term. Certain of our lease agreements include one or more options to renew. The exercise of lease renewal options is generally at our discretion. Variable lease expense primarily relates to maintenance and other monthly expenses that do not depend on an index or rate.

We determine if an arrangement is a lease at contract inception. Lease and non-lease components are accounted for as a single component for all leases. Operating lease right to use (ROU) assets and liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term, which includes optional renewal periods if we determine it is reasonably certain that the option will be exercised. As our leases do not provide an implicit rate, the discount rate used in the present value calculation represents our incremental borrowing rate determined using information available at the commencement date.

Operating lease expense is included as a component of general and administrative expenses in our condensed consolidated statements of operations. Sublease income and variable lease expenses are de minimis. For the three months ended December 31, 2023 and 2022, operating lease expense and cash payments on lease liabilities were as follows:

	Three Months Ended December 31,
in thousands	2023		2022
Operating lease expense	$	1,081	$	1,001
Cash payments on lease liabilities	$	973	$	1,141

At December 31, 2023 and 2022, the weighted-average remaining lease term and discount rate were as follows:

	As of December 31,
	2023	2022
Weighted-average remaining lease term	6.9 years	4.3 years
Weighted-average discount rate	6.03%	4.41%

The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of December 31, 2023:

Fiscal Years Ending September 30,
in thousands
2024(a)	$	3,156
2025	4,004
2026	3,393
2027	2,467
2028	2,212
Thereafter	7,967
Total lease payments(b)	23,199
Less: imputed interest	4,908
Total operating lease liabilities	$	18,291

(a) Remaining lease payments are for the period beginning January 1, 2024 through September 30, 2024.

(b) Lease payments exclude $3.5 million of legally binding minimum lease payments for office leases signed but not yet commenced. The related ROU asset and operating lease liability are not reflected on the Company's condensed consolidated balance sheet as of December 31, 2023.

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Contingencies

3 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

Beazer Homes and certain of its subsidiaries have been and continue to be named as defendants in various construction defect claims, complaints, and other legal actions. The Company is subject to the possibility of loss contingencies related to these defects as well as others arising from its business. In determining loss contingencies, we consider the likelihood of loss and our ability to reasonably estimate the amount of such loss. An estimated loss is recorded when it is considered probable that a liability has been incurred and the amount of loss can be reasonably estimated.

Warranty Reserves

We currently provide a limited warranty ranging from one to two years covering workmanship and materials per our defined quality standards. In addition, we provide a limited warranty for up to ten years covering only certain defined structural element failures.

Our homebuilding work is performed by subcontractors who typically must agree to indemnify us with regard to their work and provide certificates of insurance demonstrating that they have met our insurance requirements and have named us as an additional insured under their policies. Therefore, many claims relating to workmanship and materials that result in warranty spending are the primary responsibility of these subcontractors.

Warranty reserves are included in other liabilities within the condensed consolidated balance sheets, and the provision for warranty accruals is included in home construction expenses in the condensed consolidated statements of operations. Reserves covering anticipated warranty expenses are recorded for each home closed, which are a function of the number of home closings in the period, the selling prices of the homes closed and the rates of accrual per home estimated as a percentage of the selling price of the home. Management assesses the adequacy of warranty reserves each reporting period based on historical experience and the expected costs to remediate potential claims. Our review includes a quarterly analysis of the historical data and trends in warranty expense by division. An analysis by division allows us to consider market-specific factors such as warranty experience, the number of home closings, the selling prices of homes, product mix, and other data in estimating warranty reserves. In addition, the analysis also contemplates the existence of any non-recurring or community-specific warranty-related matters that might not be included in historical data and trends that may need to be separately estimated based on management's judgment of the ultimate cost of repair for that specific issue. While estimated warranty liabilities are adjusted each reporting period based on the results of our quarterly analyses, we may not accurately predict actual warranty costs, which could lead to significant changes in the reserve.

In addition, we maintain third-party insurance, subject to applicable self-insured retentions, for most construction defects that we encounter in the normal course of business. We believe that our warranty and litigation accruals and third-party insurance are adequate to cover the ultimate resolution of our potential liabilities associated with known and anticipated warranty and construction defect related claims and litigation. However, there can be no assurance that the terms and limitations of the limited warranty will be effective against claims made by homebuyers; that we will be able to renew our insurance coverage or renew it at reasonable rates; that we will not be liable for damages, the cost of repairs, and/or the expense of litigation surrounding possible construction defects, soil subsidence, or building related claims; or that claims will not arise out of events or circumstances not covered by insurance and/or not subject to effective indemnification agreements with our subcontractors.

Changes in warranty reserves are as follows for the periods presented:

	Three Months Ended
	December 31,
in thousands	2023		2022
Balance at beginning of period	$	13,046	$	13,926
Warranty provision	1,904		1,603
Warranty expenditures	(2,602)		(2,370)
Balance at end of period	$	12,348	$	13,159

Insurance Recoveries

The Company has insurance policies that provide for the reimbursement of certain warranty costs incurred above specified thresholds for each period covered. Amounts recorded for anticipated insurance recoveries are reflected within the condensed consolidated statements of operations as a reduction of home construction expenses, if applicable. Amounts not yet received from our insurer are recorded on a gross basis, without any reduction for the associated warranty expense, within accounts receivable on our condensed consolidated balance sheets, if applicable.

Litigation

In the normal course of business, we and certain of our subsidiaries are subject to various lawsuits and have been named as defendants in various claims, complaints, and other legal actions, most relating to construction defects, moisture intrusion, and product liability. Certain of the liabilities resulting from these actions are covered in whole or in part by insurance.

We cannot predict or determine the timing or final outcome of these lawsuits or the effect that any adverse findings or determinations in pending lawsuits may have on us. In addition, an estimate of possible loss or range of loss, if any, cannot presently be made with respect to certain of these pending matters. An unfavorable determination in pending lawsuits could result in the payment by us of substantial monetary damages that may not be fully covered by insurance. Further, the legal costs associated with the lawsuits and the amount of time required to be spent by management and our Board of Directors on these matters, even if we are ultimately successful, could have a material adverse effect on our financial condition, results of operations, or cash flows.

We have an accrual of $9.0 million and $9.4 million in other liabilities on our condensed consolidated balance sheets related to litigation matters as of December 31, 2023 and September 30, 2023, respectively.

Surety Bonds and Letters of Credit

We had outstanding letters of credit and surety bonds of $36.7 million and $259.5 million, respectively, as of December 31, 2023, related principally to our obligations to local governments to construct roads and other improvements in various developments.

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Fair Value Measurements

3 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

As of the dates presented, we had assets on our condensed consolidated balance sheets that were required to be measured at fair value on a recurring or non-recurring basis. We use a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value as follows:

•Level 1 – Quoted prices in active markets for identical assets or liabilities;

•Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with market data; and

•Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability.

Certain of our assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value of these assets may not be recoverable. We review our long-lived assets, including inventory, for recoverability when factors indicate an impairment may exist, but no less than quarterly. The fair value of assets deemed to be impaired is determined based upon the type of asset being evaluated. The fair value of our owned inventory assets, when required to be calculated, is further discussed within Note 4. Due to the substantial use of unobservable inputs in valuing the assets on a non-recurring basis, they are classified within Level 3.

Determining within which hierarchical level an asset or liability falls requires significant judgment. We evaluate our hierarchy disclosures each quarter. The following table presents the period-end balances of assets measured at fair value for each hierarchy level:

in thousands	Level 1		Level 2		Level 3		Total
As of December 31, 2023
Deferred compensation plan assets(a)	$	7,278	$	—	$	—	$	7,278
As of September 30, 2023
Deferred compensation plan assets(a)	$	6,495	$	—	$	—	$	6,495

(a) Amount is measured at fair value on a recurring basis and included in other assets within the condensed consolidated balance sheets.

The fair value of cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, other liabilities, and amounts due under the Unsecured Facility (if outstanding) approximate their carrying amounts due to the short maturity of these assets and liabilities. When outstanding, obligations related to land not owned under option agreements approximate fair value.

The following table presents the carrying value and estimated fair value of certain other financial assets and liabilities as of December 31, 2023 and September 30, 2023:

	As of December 31, 2023				As of September 30, 2023
in thousands	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets
Certificates of deposit(a)	$	9,174	$	9,185	$	1,951	$	1,986
Total financial assets	$	9,174	$	9,185	$	1,951	$	1,986
Financial liabilities(b)
Senior Notes(c)	$	899,791	$	901,776	$	903,691	$	858,528
Junior Subordinated Notes(d)	74,853		74,853		74,337		74,337
Total financial liabilities	$	974,644	$	976,629	$	978,028	$	932,865

(a) Certificates of deposit held for investment with an original maturity greater than three months are carried at original cost plus accrued interest and reported as other assets on the condensed consolidated balance sheets. The type of certificates of deposit that the Company invests in are not considered debt securities under ASC Topic 320, Investments - Debt Securities. The estimated fair value of our certificates of deposit has been determined using quoted market rates (Level 2).

(b) Carrying amounts for financial liabilities are net of unamortized debt issuance costs or accretion.

(c) The estimated fair value of our publicly-held Senior Notes has been determined using quoted market rates (Level 2).

(d) Since there is no trading market for our Junior Subordinated Notes, the fair value of these notes is estimated by discounting scheduled cash flows through maturity (Level 3). The discount rate is estimated using market rates currently being offered on loans with similar terms and credit quality. Judgment is required in interpreting market data to develop these estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange.

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Income Taxes

3 Months Ended

Dec. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income Tax Provision

The Company's income tax provision for quarterly interim periods is based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent, or unusual items. We recognized income tax expense from continuing operations of $1.2 million for the three months ended December 31, 2023, compared to $4.2 million for the three months ended December 31, 2022. Income tax expense for the three months ended December 31, 2023 was primarily driven by income tax expense on earnings from continuing operations and permanent differences, partially offset by both energy efficiency tax credits generated from expected closings during the current year and the discrete tax benefits related to the generation of additional energy efficiency tax credits from homes closed in prior periods, as well as stock-based compensation activity in the period. Income tax expense for the three months ended December 31, 2022 was primarily driven by income tax expense on earnings from continuing operations, permanent differences, and the discrete tax expense related to stock-based compensation activity in the period, partially offset by the discrete tax benefits related to the generation of additional energy efficiency tax credits from homes closed in prior periods.

Deferred Tax Assets and Liabilities

The Company continues to evaluate its deferred tax assets each period to determine if a valuation allowance is required based on whether it is more likely than not that some portion of these deferred tax assets will not be realized. As of December 31, 2023, management concluded that it is more likely than not that all of our federal and certain state deferred tax assets will be realized. As part of our analysis, we considered both positive and negative factors that impact profitability and whether those factors would lead to a change in the estimate of our deferred tax assets that may be realized in the future. At this time, our conclusions on the valuation allowance and Internal Revenue Code Section 382 limitations related to our deferred tax assets remain consistent with the determinations we made during the period ended September 30, 2023, and such conclusions are based on similar company specific and industry factors to those discussed in Note 12 to the consolidated financial statements within our 2023 Annual Report.

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Stock-based Compensation

3 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Stock-based Compensation

Stock-based Compensation

Stock-based compensation expense is included in general and administrative expenses in our condensed consolidated statements of operations. Following is a summary of stock-based compensation expense related to stock options and restricted stock awards for the three months ended December 31, 2023 and 2022.

	Three Months Ended
	December 31,
in thousands	2023		2022
Stock-based compensation expense	$	1,673	$	1,580

Stock Options

Following is a summary of stock option activity for the three months ended December 31, 2023:

	Three Months Ended
	December 31, 2023
	Shares	Weighted Average Exercise Price
Outstanding at beginning of period	13,575	$	9.61
Outstanding at end of period	13,575	9.61
Exercisable at end of period	13,475	$	9.48

As of December 31, 2023 and September 30, 2023, there was less than $0.1 million of total unrecognized compensation costs related to unvested stock options, respectively.

Restricted Stock Awards

During the three months ended December 31, 2023, the Company issued time-based and performance-based restricted stock awards. The time-based restricted shares granted to our non-employee directors vest on the first anniversary of the grant, while the time-based restricted shares granted to our executive officers and other employees generally vest ratably over two to three years from the date of grant. Performance-based restricted share awards vest subject to the achievement of performance and market conditions over a three-year performance period.

Following is a summary of restricted stock activity for the three months ended December 31, 2023:

	Three Months Ended December 31, 2023
	Performance-Based Restricted Shares	Time-Based Restricted Shares	Total Restricted Shares
Beginning of period	348,223	593,834	942,057
Granted (a)	180,144	180,594	360,738
Vested	(210,176)	(318,899)	(529,075)
Forfeited	—	(8,248)	(8,248)
End of period	318,191	447,281	765,472

(a) Each of our performance shares represent a contingent right to receive one share of the Company's common stock if vesting is satisfied at the end of the three-year performance period. Our performance stock award plans provide that any performance shares earned in excess of the target number of performance shares issued may be settled in cash or additional shares at the discretion of the Compensation Committee. In November 2023, we issued 108,108 shares earned above target level based on the performance level achieved under the fiscal 2021 performance-based award plan.

As of December 31, 2023 and September 30, 2023, total unrecognized compensation costs related to unvested restricted stock awards were $12.0 million and $6.9 million, respectively. The costs remaining as of December 31, 2023 are expected to be recognized over a weighted average period of 2.13 years.

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Earnings Per Share

3 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic income per share is calculated by dividing net income by the weighted-average number of shares outstanding during the period. Diluted income per share adjusts the basic income per share for the effects of any potentially dilutive securities in periods in which the Company has net income and such effects are dilutive under the treasury stock method.

Following is a summary of the components of basic and diluted income per share for the periods presented:

	Three Months Ended December 31,
in thousands (except per share data)	2023		2022
Numerator:
Income from continuing operations	$	21,728	$	24,408
Loss from discontinued operations, net of tax	—		(77)
Net income	$	21,728	$	24,331
Denominator:
Basic weighted-average shares	30,595		30,219
Dilutive effect of restricted stock awards	379		257
Dilutive effect of stock options	8		4
Diluted weighted-average shares(a)	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

(a) The following potentially dilutive shares were excluded from the calculation of diluted income per share as a result of their anti-dilutive effect.

	Three Months Ended December 31,
in thousands	2023	2022
Stock options	—	13
Time-based restricted stock	68	147

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Other Liabilities

3 Months Ended

Dec. 31, 2023

Other Liabilities Disclosure [Abstract]

Other Liabilities

Other Liabilities

Other liabilities include the following as of December 31, 2023 and September 30, 2023:

in thousands	As of December 31, 2023		As of September 30, 2023
Accrued compensations and benefits	24,133		$	50,242
Customer deposits	27,018		27,577
Accrued interest	15,016		23,132
Warranty reserves	12,348		13,046
Litigation accruals	8,973		9,404
Income tax liabilities	2,705		272
Other	30,677		33,288
Total	$	120,870	$	156,961

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Segment Information

3 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Segment Information

Segment Information

We currently operate in 13 states that are grouped into three homebuilding segments based on geography. Revenues from our homebuilding segments are derived from the sale of homes that we construct, land and lot sales, and our title operations. Land sales revenue relates to land that does not fit within our homebuilding programs and strategic plans. We also provide title examinations for our homebuyers in certain markets. Our reportable segments have been determined on a basis that is used internally by management for evaluating segment performance and resource allocations. We have considered the applicable aggregation criteria and have combined our homebuilding operations into three reportable segments as follows:

West: Arizona, California, Nevada, and Texas

East: Delaware, Indiana, Maryland, New Jersey(a), Tennessee, and Virginia

Southeast: Florida, Georgia, North Carolina, and South Carolina

(a) During our fiscal 2015, we made the decision that we would not continue to reinvest in new homebuilding assets in our New Jersey division; therefore, it is no longer considered an active operation. However, it is included in this listing because the segment information below continues to include New Jersey.

Management’s evaluation of segment performance is based on segment operating income. Operating income for our homebuilding segments is defined as homebuilding and land sales and other revenue less home construction, land development, land sales expense, title operations expense, commission expense, depreciation and amortization, and certain G&A expenses that are incurred by or allocated to our homebuilding segments. The accounting policies of our segments are those described in Note 2 to the consolidated financial statements within our 2023 Annual Report.

The following tables contain our revenue, operating income, and depreciation and amortization by segment for the periods presented:

	Three Months Ended
	December 31,
in thousands	2023		2022
Revenue
West	$	237,093	$	274,815
East	74,777		86,190
Southeast	74,948		83,923
Total revenue	$	386,818	$	444,928

	Three Months Ended
	December 31,
in thousands	2023		2022
Operating income
West	$	28,339	$	37,357
East	6,356		9,262
Southeast	9,140		10,679
Segment total	43,835		57,298
Corporate and unallocated(a)	(23,570)		(28,796)
Total operating income	$	20,265	$	28,502

(a) Includes amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, when applicable, expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments reported above, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments.

	Three Months Ended
	December 31,
in thousands	2023		2022
Depreciation and amortization
West	$	1,311	$	1,605
East	209		273
Southeast	320		330
Segment total	1,840		2,208
Corporate and unallocated(a)	393		305
Total depreciation and amortization	$	2,233	$	2,513

(a) Represents depreciation and amortization related to assets held by our corporate functions that benefit all segments.

The following table presents capital expenditures by segment for the periods presented:

	Three Months Ended
	December 31,
in thousands	2023		2022
Capital expenditures
West	$	3,600	$	1,510
East	369		533
Southeast	185		717
Corporate and unallocated	1,390		485
Total capital expenditures	$	5,544	$	3,245

The following table presents assets by segment as of December 31, 2023 and September 30, 2023:

in thousands	As of December 31, 2023		As of September 30, 2023
Assets
West	$	1,124,278	$	994,597
East	409,775		356,020
Southeast	342,053		320,430
Corporate and unallocated(a)	513,345		739,986
Total assets	$	2,389,451	$	2,411,033

(a) Primarily consists of cash and cash equivalents, restricted cash, deferred taxes, capitalized interest and indirect costs, and other items that are not allocated to the segments.

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Pay vs Performance Disclosure - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Pay vs Performance Disclosure
Net income	$ 21,728	$ 24,331

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Insider Trading Arrangements	3 Months Ended
	Dec. 31, 2023
Trading Arrangements, by Individual
Rule 10b5-1 Arrangement Adopted	false
Non-Rule 10b5-1 Arrangement Adopted	false
Rule 10b5-1 Arrangement Terminated	false
Non-Rule 10b5-1 Arrangement Terminated	false

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Basis of Presentation and Summary of Significant Accounting Policies (Policies)

3 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Basis of Consolidation

Basis of Consolidation

The accompanying unaudited condensed consolidated financial statements include the accounts of Beazer Homes USA, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidation. Our net income is equivalent to our comprehensive income, so we have not presented a separate statement of comprehensive income.

In the past, we have discontinued homebuilding operations in various markets. Results from certain of these exited markets are reported as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented.

Our fiscal year 2024 began on October 1, 2023 and ends on September 30, 2024. Our fiscal year 2023 began on October 1, 2022 and ended on September 30, 2023.

Use of Estimates

Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make informed estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Accordingly, actual results could differ from these estimates.

Share Repurchase Program

Share Repurchase Program

In May 2022, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $50.0 million of its outstanding common stock. This share repurchase program replaced the prior share repurchase program, authorized in the first quarter of fiscal 2019 of up to $50.0 million of common stock repurchases, pursuant to which $12.0 million of the capacity remained prior to the replacement of the program. No share repurchases were made during the three months ended December 31, 2023 and 2022. As of December 31, 2023, the remaining availability of the new share repurchase program was $41.8 million. The repurchase program has no expiration date. Previously repurchased shares under the program have been retired.

Revenue Recognition

Revenue Recognition

We recognize revenue upon the transfer of promised goods to our customers in an amount that reflects the consideration to which we expect to be entitled by applying the process specified in Accounting Standards Codification (ASC) Topic 606, Revenue from Contracts with Customers.

Homebuilding revenue

Homebuilding revenue is reported net of discounts and is generally recognized when title to and possession of the home is transferred to the buyer at the closing date. The performance obligation to deliver the home is generally satisfied in less than one year from the original contract date.

Home sale contract assets consist of cash from home closings held by title companies in escrow for our benefit, typically for less than five days, and are considered accounts receivable. Towards the end of the quarter ended December 31, 2023, we experienced a temporary increase in our accounts receivable balance due to a cybersecurity incident at one of the nation's largest title insurers. The incident, which has been widely reported and resulted in widespread delays in home closings and transfers of closing proceeds across the country, was resolved following the end of the quarter, and since that time, the title insurer has resumed normal business operations. Accordingly, as of the date hereof, all delayed home closings experienced by us as a result of the incident have now been consummated and closing proceeds have been fully collected.

Contract liabilities include customer deposits related to sold but undelivered homes and totaled $27.0 million and $27.6 million as of December 31, 2023 and September 30, 2023, respectively. Of the customer liabilities outstanding as of September 30, 2023, $11.8 million was recognized in revenue during the three months ended December 31, 2023 upon closing of the related homes.

Land sales and other revenue

Land sales revenue relates to land that does not fit within our homebuilding programs or strategic plans. Land sales typically require cash consideration on the closing date, which is generally when performance obligations are satisfied. We also provide title examinations for our homebuyers in certain markets. Revenues associated with our title operations are recognized when closing services are rendered and title insurance policies are issued, both of which generally occur as each home is closed.

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Segment Reporting. In November 2023, the FASB issued Accounting Standards Update (ASU) 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures. ASU 2023-07 expands public entities’ segment disclosures by requiring disclosure of significant segment expenses that are regularly provided to the chief operating decision maker and included within each reported measure of segment profit or loss, an amount and description of its composition for other segment items, and interim disclosures of a reportable segment’s profit or loss and assets. All disclosure requirements of ASU 2023-07 are required for entities with a single reportable segment. ASU 2023-07 will be effective for our fiscal year ending September 30, 2025 and for our interim periods starting in our first quarter of fiscal 2026. Early adoption is permitted and the amendments in this update are required to be applied on a retrospective basis. The Company is currently evaluating the impact that the adoption of ASU 2023-07 may have on our consolidated financial statements and disclosures.

Income Taxes. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures. ASU 2023-09 is intended to enhance the transparency and decision usefulness of income tax disclosures. The amendments in ASU 2023-09 address investor requests for enhanced income tax information primarily through changes to the rate reconciliation and income taxes paid information. ASU 2023-09 will be effective for our fiscal year ending September 30, 2026. Early adoption is permitted and the amendments in this update should be applied on a prospective basis. The Company is currently evaluating the impact that the adoption of ASU 2023-09 may have on our consolidated financial statements and disclosures.

Fair Value Measurements

As of the dates presented, we had assets on our condensed consolidated balance sheets that were required to be measured at fair value on a recurring or non-recurring basis. We use a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value as follows:

•Level 1 – Quoted prices in active markets for identical assets or liabilities;

•Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with market data; and

•Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability.

Certain of our assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value of these assets may not be recoverable. We review our long-lived assets, including inventory, for recoverability when factors indicate an impairment may exist, but no less than quarterly. The fair value of assets deemed to be impaired is determined based upon the type of asset being evaluated. The fair value of our owned inventory assets, when required to be calculated, is further discussed within Note 4. Due to the substantial use of unobservable inputs in valuing the assets on a non-recurring basis, they are classified within Level 3.

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Basis of Presentation and Summary of Significant Accounting Policies (Tables)

3 Months Ended

Dec. 31, 2023

Accounting Policies [Abstract]

Disaggregation of Revenue

The following table presents our total revenue disaggregated by revenue stream:

	Three Months Ended
	December 31,
in thousands	2023		2022
Homebuilding revenue	$	380,919	$	444,084
Land sales and other revenue	5,899		844
Total revenue(a)	$	386,818	$	444,928

(a) Please see Note 14 for total revenue disaggregated by reportable segment.

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Supplemental Cash Flow Information (Tables)

3 Months Ended

Dec. 31, 2023

Supplemental Cash Flow Elements [Abstract]

Supplemental disclosure of non-cash activity

The following table presents supplemental disclosure of non-cash and cash activity as well as a reconciliation of total cash balances between the condensed consolidated balance sheets and condensed consolidated statements of cash flows for the periods presented:

	Three Months Ended
	December 31,
in thousands	2023		2022
Supplemental disclosure of cash activity:
Interest payments	$	25,261	$	24,524
Income tax payments	$	380	$	—
Tax refunds received	$	—	$	59
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	$	104,226	$	120,746
Restricted cash	34,098		35,899
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$	138,324	$	156,645

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Owned Inventory (Tables)

3 Months Ended

Dec. 31, 2023

Inventory Disclosure [Abstract]

Schedule of inventory

The components of our owned inventory are as follows as of December 31, 2023 and September 30, 2023:

in thousands	As of December 31, 2023		As of September 30, 2023
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

Schedule of total owned inventory, by segment

Total owned inventory by reportable segment is presented in the table below as of December 31, 2023 and September 30, 2023:

in thousands	Projects in Progress(a)		Land Held for Future Development		Land Held for Sale		Total Owned Inventory
December 31, 2023
West	$	1,031,135	$	3,483	$	13,303	$	1,047,921
East	371,485		10,888		3,482		385,855
Southeast	320,127		5,508		676		326,311
Corporate and unallocated(b)	193,511		—		—		193,511
Total	$	1,916,258	$	19,879	$	17,461	$	1,953,598
September 30, 2023
West	$	914,908	$	3,483	$	14,702	$	933,093
East	325,395		10,888		3,201		339,484
Southeast	297,142		5,508		676		303,326
Corporate and unallocated(b)	180,300		—		—		180,300
Total	$	1,717,745	$	19,879	$	18,579	$	1,756,203

(a) Projects in progress include homes under construction, land under development, capitalized interest, and model home categories from the preceding table.

(b) Projects in progress amount includes capitalized interest and indirect costs that are maintained within our Corporate and unallocated segment.

Schedule of inventory impairments and abandonment charges, by reportable segment

The following table presents, by reportable segment, our total impairment and abandonment charges for the periods presented:

	Three Months Ended December 31,
in thousands	2023		2022
Abandonments:
West	$	—	$	36
East	—		154
Total abandonments charges	$	—	$	190
Total impairment and abandonment charges	$	—	$	190

Summary of interests in lot option agreements

The following table provides a summary of our interests in lot option agreements as of December 31, 2023 and September 30, 2023:

	As of December 31, 2023		As of September 30, 2023
in thousands
Deposits and non-refundable pre-acquisition costs incurred(a)	$	166,394	$	165,371
Remaining purchase price if lot option agreements are exercised	$	924,764	$	949,447

(a) Amount is included as a component of land under development within our owned inventory in the condensed consolidated balance sheets.

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Interest (Tables)

3 Months Ended

Dec. 31, 2023

Real Estate [Abstract]

Real Estate Inventory, Capitalized Interest Costs

The following table presents certain information regarding interest for the periods presented:

	Three Months Ended December 31,
in thousands	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(a)	(11,190)		(13,775)
Capitalized interest in inventory, end of period	$	119,596	$	113,143

(a) Capitalized interest amortized to home construction and land sales expenses varies based on the number of homes closed during the period and land sales, if any, as well as other factors.

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Borrowings (Tables)

3 Months Ended

Dec. 31, 2023

Debt Disclosure [Abstract]

Schedule of Long-Term Debt

The Company's debt, net of unamortized debt issuance costs consisted of the following as of December 31, 2023 and September 30, 2023:

in thousands	Maturity Date	December 31, 2023		September 30, 2023
6.750% Senior Notes (2025 Notes)	March 2025	$	197,915	$	202,195
5.875% Senior Notes (2027 Notes)	October 2027	357,255		357,255
7.250% Senior Notes (2029 Notes)	October 2029	350,000		350,000
Unamortized debt issuance costs		(5,379)		(5,759)
Total Senior Notes, net		899,791		903,691
Junior Subordinated Notes (net of unamortized accretion of $25,920 and $26,436, respectively)	July 2036	74,853		74,337
Senior Unsecured Revolving Credit Facility	October 2026	—		—
Total debt, net		$	974,644	$	978,028

Debt Instrument Redemption

For additional redemption features, refer to the table below that summarizes the redemption terms of our Senior Notes:

Senior Note Description	Issuance Date	Maturity Date	Redemption Terms
6.750% Senior Notes	March 2017	March 2025	Callable at any time prior to March 15, 2020, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after March 15, 2020, callable at a redemption price equal to 105.063% of the principal amount; on or after March 15, 2021, callable at a redemption price equal to 103.375% of the principal amount; on or after March 15, 2022, callable at a redemption price equal to 101.688% of the principal amount; on or after March 15, 2023, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest.
5.875% Senior Notes	October 2017	October 2027	Callable at any time prior to October 15, 2022, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2022, callable at a redemption price equal to 102.938% of the principal amount; on or after October 15, 2023, callable at a redemption price equal to 101.958% of the principal amount; on or after October 15, 2024, callable at a redemption price equal to 100.979% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest.
7.250% Senior Notes	September 2019	October 2029	Callable at any time prior to October 15, 2024, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2024, callable at a redemption price equal to 103.625% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 102.417% of the principal amount; on or after October 15, 2026, callable at a redemption price equal to 101.208% of the principal amount; on or after October 15, 2027, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest.

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Operating Leases (Tables)

3 Months Ended

Dec. 31, 2023

Leases [Abstract]

Lease, Cost

For the three months ended December 31, 2023 and 2022, operating lease expense and cash payments on lease liabilities were as follows:

	Three Months Ended December 31,
in thousands	2023		2022
Operating lease expense	$	1,081	$	1,001
Cash payments on lease liabilities	$	973	$	1,141

At December 31, 2023 and 2022, the weighted-average remaining lease term and discount rate were as follows:

	As of December 31,
	2023	2022
Weighted-average remaining lease term	6.9 years	4.3 years
Weighted-average discount rate	6.03%	4.41%

Lessee, Operating Lease, Liability, Maturity

The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of December 31, 2023:

Fiscal Years Ending September 30,
in thousands
2024(a)	$	3,156
2025	4,004
2026	3,393
2027	2,467
2028	2,212
Thereafter	7,967
Total lease payments(b)	23,199
Less: imputed interest	4,908
Total operating lease liabilities	$	18,291

(a) Remaining lease payments are for the period beginning January 1, 2024 through September 30, 2024.

(b) Lease payments exclude $3.5 million of legally binding minimum lease payments for office leases signed but not yet commenced. The related ROU asset and operating lease liability are not reflected on the Company's condensed consolidated balance sheet as of December 31, 2023.

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Contingencies (Tables)

3 Months Ended

Dec. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Warranty reserves

Changes in warranty reserves are as follows for the periods presented:

	Three Months Ended
	December 31,
in thousands	2023		2022
Balance at beginning of period	$	13,046	$	13,926
Warranty provision	1,904		1,603
Warranty expenditures	(2,602)		(2,370)
Balance at end of period	$	12,348	$	13,159

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Fair Value Measurements (Tables)

3 Months Ended

Dec. 31, 2023

Fair Value Disclosures [Abstract]

Schedule of fair value assets measured on a recurring and non-recurring basis

The following table presents the period-end balances of assets measured at fair value for each hierarchy level:

in thousands	Level 1		Level 2		Level 3		Total
As of December 31, 2023
Deferred compensation plan assets(a)	$	7,278	$	—	$	—	$	7,278
As of September 30, 2023
Deferred compensation plan assets(a)	$	6,495	$	—	$	—	$	6,495

(a) Amount is measured at fair value on a recurring basis and included in other assets within the condensed consolidated balance sheets.

Schedule of carrying values and estimated fair values of other financial assets and liabilities

The following table presents the carrying value and estimated fair value of certain other financial assets and liabilities as of December 31, 2023 and September 30, 2023:

	As of December 31, 2023				As of September 30, 2023
in thousands	Carrying Amount		Fair Value		Carrying Amount		Fair Value
Financial assets
Certificates of deposit(a)	$	9,174	$	9,185	$	1,951	$	1,986
Total financial assets	$	9,174	$	9,185	$	1,951	$	1,986
Financial liabilities(b)
Senior Notes(c)	$	899,791	$	901,776	$	903,691	$	858,528
Junior Subordinated Notes(d)	74,853		74,853		74,337		74,337
Total financial liabilities	$	974,644	$	976,629	$	978,028	$	932,865

(a) Certificates of deposit held for investment with an original maturity greater than three months are carried at original cost plus accrued interest and reported as other assets on the condensed consolidated balance sheets. The type of certificates of deposit that the Company invests in are not considered debt securities under ASC Topic 320, Investments - Debt Securities. The estimated fair value of our certificates of deposit has been determined using quoted market rates (Level 2).

(b) Carrying amounts for financial liabilities are net of unamortized debt issuance costs or accretion.

(c) The estimated fair value of our publicly-held Senior Notes has been determined using quoted market rates (Level 2).

(d) Since there is no trading market for our Junior Subordinated Notes, the fair value of these notes is estimated by discounting scheduled cash flows through maturity (Level 3). The discount rate is estimated using market rates currently being offered on loans with similar terms and credit quality. Judgment is required in interpreting market data to develop these estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange.

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Stock-based Compensation (Tables)

3 Months Ended

Dec. 31, 2023

Share-Based Payment Arrangement [Abstract]

Summary of stock-based compensation expense

Following is a summary of stock-based compensation expense related to stock options and restricted stock awards for the three months ended December 31, 2023 and 2022.

	Three Months Ended
	December 31,
in thousands	2023		2022
Stock-based compensation expense	$	1,673	$	1,580

Schedule of stock options outstanding

Following is a summary of stock option activity for the three months ended December 31, 2023:

	Three Months Ended
	December 31, 2023
	Shares	Weighted Average Exercise Price
Outstanding at beginning of period	13,575	$	9.61
Outstanding at end of period	13,575	9.61
Exercisable at end of period	13,475	$	9.48

Schedule of nonvested stock awards activity

Following is a summary of restricted stock activity for the three months ended December 31, 2023:

	Three Months Ended December 31, 2023
	Performance-Based Restricted Shares	Time-Based Restricted Shares	Total Restricted Shares
Beginning of period	348,223	593,834	942,057
Granted (a)	180,144	180,594	360,738
Vested	(210,176)	(318,899)	(529,075)
Forfeited	—	(8,248)	(8,248)
End of period	318,191	447,281	765,472

(a) Each of our performance shares represent a contingent right to receive one share of the Company's common stock if vesting is satisfied at the end of the three-year performance period. Our performance stock award plans provide that any performance shares earned in excess of the target number of performance shares issued may be settled in cash or additional shares at the discretion of the Compensation Committee. In November 2023, we issued 108,108 shares earned above target level based on the performance level achieved under the fiscal 2021 performance-based award plan.

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Earnings Per Share (Tables)

3 Months Ended

Dec. 31, 2023

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

Following is a summary of the components of basic and diluted income per share for the periods presented:

	Three Months Ended December 31,
in thousands (except per share data)	2023		2022
Numerator:
Income from continuing operations	$	21,728	$	24,408
Loss from discontinued operations, net of tax	—		(77)
Net income	$	21,728	$	24,331
Denominator:
Basic weighted-average shares	30,595		30,219
Dilutive effect of restricted stock awards	379		257
Dilutive effect of stock options	8		4
Diluted weighted-average shares(a)	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

(a) The following potentially dilutive shares were excluded from the calculation of diluted income per share as a result of their anti-dilutive effect.

Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share

	Three Months Ended December 31,
in thousands	2023	2022
Stock options	—	13
Time-based restricted stock	68	147

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Other Liabilities (Tables)

3 Months Ended

Dec. 31, 2023

Other Liabilities Disclosure [Abstract]

Schedule of other liabilities

Other liabilities include the following as of December 31, 2023 and September 30, 2023:

in thousands	As of December 31, 2023		As of September 30, 2023
Accrued compensations and benefits	24,133		$	50,242
Customer deposits	27,018		27,577
Accrued interest	15,016		23,132
Warranty reserves	12,348		13,046
Litigation accruals	8,973		9,404
Income tax liabilities	2,705		272
Other	30,677		33,288
Total	$	120,870	$	156,961

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Segment Information (Tables)

3 Months Ended

Dec. 31, 2023

Segment Reporting [Abstract]

Schedule of segment reporting information

The following tables contain our revenue, operating income, and depreciation and amortization by segment for the periods presented:

	Three Months Ended
	December 31,
in thousands	2023		2022
Revenue
West	$	237,093	$	274,815
East	74,777		86,190
Southeast	74,948		83,923
Total revenue	$	386,818	$	444,928

	Three Months Ended
	December 31,
in thousands	2023		2022
Operating income
West	$	28,339	$	37,357
East	6,356		9,262
Southeast	9,140		10,679
Segment total	43,835		57,298
Corporate and unallocated(a)	(23,570)		(28,796)
Total operating income	$	20,265	$	28,502

(a) Includes amortization of capitalized interest, capitalization and amortization of indirect costs, impairment of capitalized interest and capitalized indirect costs, when applicable, expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments reported above, including information technology, treasury, corporate finance, legal, branding and national marketing, and certain other amounts that are not allocated to our operating segments.

	Three Months Ended
	December 31,
in thousands	2023		2022
Depreciation and amortization
West	$	1,311	$	1,605
East	209		273
Southeast	320		330
Segment total	1,840		2,208
Corporate and unallocated(a)	393		305
Total depreciation and amortization	$	2,233	$	2,513

(a) Represents depreciation and amortization related to assets held by our corporate functions that benefit all segments.

The following table presents capital expenditures by segment for the periods presented:

	Three Months Ended
	December 31,
in thousands	2023		2022
Capital expenditures
West	$	3,600	$	1,510
East	369		533
Southeast	185		717
Corporate and unallocated	1,390		485
Total capital expenditures	$	5,544	$	3,245

The following table presents assets by segment as of December 31, 2023 and September 30, 2023:

in thousands	As of December 31, 2023		As of September 30, 2023
Assets
West	$	1,124,278	$	994,597
East	409,775		356,020
Southeast	342,053		320,430
Corporate and unallocated(a)	513,345		739,986
Total assets	$	2,389,451	$	2,411,033

(a) Primarily consists of cash and cash equivalents, restricted cash, deferred taxes, capitalized interest and indirect costs, and other items that are not allocated to the segments.

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Description of Business (Details)	3 Months Ended
	Dec. 31, 2023 state region pillar
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Number of states in which home building segments operate | state	13
Number of regions in which entity operates | region	3
Number of strategic pillars | pillar	3

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Basis of Presentation and Summary of Significant Accounting Policies - Share Repurchase Program (Details) - USD ($) $ in Millions	Dec. 31, 2023	May 31, 2022	Apr. 30, 2022
Accounting Policies [Abstract]
Authorized amount repurchase of common stock		$ 50.0
Remaining authorized repurchase amount	$ 41.8		$ 12.0

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Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023
Disaggregation of Revenue [Line Items]
Total revenue	$ 386,818	$ 444,928
Customer deposits	27,018		$ 27,577
Contract with customer, liability, revenue recognized	11,800
Homebuilding revenue
Disaggregation of Revenue [Line Items]
Total revenue	380,919	444,084
Land sales and other revenue
Disaggregation of Revenue [Line Items]
Total revenue	$ 5,899	$ 844

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Supplemental Cash Flow Information - Supplemental Disclosure of Non-cash Activity (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022	Sep. 30, 2023	Sep. 30, 2022
Supplemental disclosure of cash activity:
Interest payments	$ 25,261	$ 24,524
Income tax payments	380	0
Tax refunds received	0	59
Reconciliation of cash, cash equivalents, and restricted cash:
Cash and cash equivalents	104,226	120,746	$ 345,590
Restricted cash	34,098	35,899	40,699
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows	$ 138,324	$ 156,645	$ 386,289	$ 251,828

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Owned Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Inventory Disclosure [Abstract]
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	$ 113,143	$ 109,088
Model homes	90,550	90,062
Total owned inventory	$ 1,953,598	$ 1,756,203

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Owned Inventory - Narrative (Details)	3 Months Ended
	Dec. 31, 2023 USD ($) home	Dec. 31, 2022 USD ($)	Sep. 30, 2023 USD ($) home
Inventory Disclosure [Abstract]
Number of homes under construction | home	2,495		2,163
Number of homes under construction, spec homes | home	982		779
Total, spec homes	$ 292,400,000		$ 218,000,000
Number of homes under construction, in-process spec homes | home	789		645
In-process spec homes	$ 211,700,000		$ 162,000,000
Number of homes under construction, finished spec homes | home	193		134
Finished spec homes	$ 80,700,000		$ 56,000,000
Threshold number of homes below a minimum threshold of profitability | home	10
Impairment of projects in process	$ 0	$ 0
Total impairment charges on land held for sale	0	0
Total abandonments charges	$ 0	$ 190,000

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Owned Inventory - Total Owned Inventory by Segment (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Segment Reporting Information [Line Items]
Projects in progress	$ 1,916,258	$ 1,717,745
Land held for future development	19,879	19,879
Land held for sale	17,461	18,579
Total owned inventory	1,953,598	1,756,203
Corporate and unallocated
Segment Reporting Information [Line Items]
Projects in progress	193,511	180,300
Land held for future development	0	0
Land held for sale	0	0
Total owned inventory	193,511	180,300
West | Operating Segments
Segment Reporting Information [Line Items]
Projects in progress	1,031,135	914,908
Land held for future development	3,483	3,483
Land held for sale	13,303	14,702
Total owned inventory	1,047,921	933,093
East | Operating Segments
Segment Reporting Information [Line Items]
Projects in progress	371,485	325,395
Land held for future development	10,888	10,888
Land held for sale	3,482	3,201
Total owned inventory	385,855	339,484
Southeast | Operating Segments
Segment Reporting Information [Line Items]
Projects in progress	320,127	297,142
Land held for future development	5,508	5,508
Land held for sale	676	676
Total owned inventory	$ 326,311	$ 303,326

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Owned Inventory - Inventory Impairments and Abandonment Charges, by Reportable Segment (Details) - USD ($)	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Real Estate Properties [Line Items]
Total abandonments charges	$ 0	$ 190,000
Total impairment and abandonment charges	0	190,000
West | Operating Segments
Real Estate Properties [Line Items]
Total abandonments charges	0	36,000
East | Operating Segments
Real Estate Properties [Line Items]
Total abandonments charges	$ 0	$ 154,000

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Owned Inventory - Summary of Interests in Lot Option Agreements (Details) - Unconsolidated Entities - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Real Estate Properties [Line Items]
Deposits and non-refundable pre-acquisition costs incurred	$ 166,394	$ 165,371
Remaining purchase price if lot option agreements are exercised	$ 924,764	$ 949,447

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Interest (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Real Estate Inventory, Capitalized Interest Costs [Roll Forward]
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

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Borrowings - Schedule of Long-term Debt (Details) - USD ($)	Dec. 31, 2023	Sep. 30, 2023	Sep. 30, 2019	Oct. 31, 2017	Mar. 31, 2017
Debt Instrument [Line Items]
Total outstanding borrowings of unconsolidated entities	$ 974,644,000	$ 978,028,000
Unamortized debt issuance costs	(5,379,000)	(5,759,000)
Senior Unsecured Revolving Credit Facility
Debt Instrument [Line Items]
Senior Unsecured Revolving Credit Facility	0	0
Senior Notes
Debt Instrument [Line Items]
Total outstanding borrowings of unconsolidated entities	899,791,000	903,691,000
Unamortized debt issuance costs	$ (5,379,000)	(5,759,000)
Senior Notes | 6.750%
Debt Instrument [Line Items]
Stated interest rate on debt instrument	6.75%				6.75%
Total outstanding borrowings of unconsolidated entities	$ 197,915,000	202,195,000
Senior Notes | 5.875%
Debt Instrument [Line Items]
Stated interest rate on debt instrument	5.875%			5.875%
Total outstanding borrowings of unconsolidated entities	$ 357,255,000	357,255,000
Senior Notes | 7.250%
Debt Instrument [Line Items]
Stated interest rate on debt instrument	7.25%		7.25%
Total outstanding borrowings of unconsolidated entities	$ 350,000,000	350,000,000
Junior Subordinated Notes
Debt Instrument [Line Items]
Total outstanding borrowings of unconsolidated entities	74,853,000	74,337,000
Unamortized accretion	$ 25,920,000	$ 26,436,000

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Borrowings - Narrative (Details) - USD ($)			1 Months Ended	3 Months Ended
	Jun. 01, 2022	Jun. 01, 2012	Jan. 31, 2010	Dec. 31, 2023	Dec. 31, 2022	Oct. 12, 2023	Oct. 11, 2023	Sep. 30, 2023	Oct. 13, 2022
Line of Credit Facility [Abstract]
Loss on extinguishment of debt, net				$ 13,000	$ 515,000
Junior Subordinated Notes [Abstract]
Total outstanding borrowings of unconsolidated entities				974,644,000				$ 978,028,000
Senior Notes
Junior Subordinated Notes [Abstract]
Total outstanding borrowings of unconsolidated entities				899,791,000				903,691,000
6.750% | Senior Notes
Line of Credit Facility [Abstract]
Extinguishment of debt				4,300,000
Loss on extinguishment of debt, net				100,000
Junior Subordinated Notes [Abstract]
Total outstanding borrowings of unconsolidated entities				197,915,000				202,195,000
5.875% | Senior Notes
Junior Subordinated Notes [Abstract]
Total outstanding borrowings of unconsolidated entities				357,255,000				357,255,000
Junior Subordinated Notes
Junior Subordinated Notes [Abstract]
Aggregate principle balance of notes				$ 100,800,000
Weighted average fixed interest rate of debt				8.10%
Junior Subordinated Debt, Modified Terms
Junior Subordinated Notes [Abstract]
Aggregate principal amount of debt			$ 75,000,000
Redemption price percentage		75.00%
Annual increase of percentage of principal amount redeemable	1.785%
Junior Subordinated Debt, Modified Terms | LIBOR
Junior Subordinated Notes [Abstract]
Variable rate floor			4.25%
Variable rate cap			9.25%
Junior Subordinated Debt, Original Terms
Junior Subordinated Notes [Abstract]
Aggregate principal amount of debt				$ 25,800,000
Junior Subordinated Debt, Original Terms | LIBOR
Junior Subordinated Notes [Abstract]
Basis spread on variable rate			2.71%	2.45%
Senior Unsecured Revolving Credit Facility
Line of Credit Facility [Abstract]
Credit facility, maximum borrowing capacity									$ 400,000,000
Credit facility, available increase in borrowing capacity									$ 100,000,000
Senior Unsecured Revolving Credit Facility				$ 0				0
Letters of credit secured using cash collateral				0
Amount of available borrowings under the secured revolving credit facility				300,000,000
Senior Unsecured Revolving Credit Facility | Senior Notes
Line of Credit Facility [Abstract]
Credit facility, maximum borrowing capacity						$ 300,000,000	$ 265,000,000
Letter of Credit
Line of Credit Facility [Abstract]
Letters of credit secured using cash collateral				$ 36,700,000				$ 31,200,000
Letter of Credit | Senior Notes
Line of Credit Facility [Abstract]
Credit facility, maximum borrowing capacity						$ 100,000,000

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Borrowings - Debt Redemption (Details) - Senior Notes	3 Months Ended
	Dec. 31, 2023	Sep. 30, 2019	Oct. 31, 2017	Mar. 31, 2017
6.750%
Debt Instrument [Line Items]
Stated interest rate on debt instrument	6.75%			6.75%
6.750% | Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Redemption price percentage	100.00%
6.750% | Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Redemption price percentage	105.063%
6.750% | Debt Instrument, Redemption, Period Three
Debt Instrument [Line Items]
Redemption price percentage	103.375%
6.750% | Debt Instrument, Redemption, Period Four
Debt Instrument [Line Items]
Redemption price percentage	101.688%
6.750% | Debt Instrument, Redemption, Period Five
Debt Instrument [Line Items]
Redemption price percentage	100.00%
5.875%
Debt Instrument [Line Items]
Stated interest rate on debt instrument	5.875%		5.875%
5.875% | Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Redemption price percentage	100.00%
5.875% | Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Redemption price percentage	102.938%
5.875% | Debt Instrument, Redemption, Period Three
Debt Instrument [Line Items]
Redemption price percentage	101.958%
5.875% | Debt Instrument, Redemption, Period Four
Debt Instrument [Line Items]
Redemption price percentage	100.979%
5.875% | Debt Instrument, Redemption, Period Five
Debt Instrument [Line Items]
Redemption price percentage	100.00%
7.250%
Debt Instrument [Line Items]
Stated interest rate on debt instrument	7.25%	7.25%
7.250% | Debt Instrument, Redemption, Period One
Debt Instrument [Line Items]
Redemption price percentage	100.00%
7.250% | Debt Instrument, Redemption, Period Two
Debt Instrument [Line Items]
Redemption price percentage	103.625%
7.250% | Debt Instrument, Redemption, Period Three
Debt Instrument [Line Items]
Redemption price percentage	102.417%
7.250% | Debt Instrument, Redemption, Period Four
Debt Instrument [Line Items]
Redemption price percentage	101.208%
7.250% | Debt Instrument, Redemption, Period Five
Debt Instrument [Line Items]
Redemption price percentage	100.00%

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Operating Leases - Lease Expense and Cash Payments & Weighted-Average Remaining Lease Term and Discount Rate (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Leases [Abstract]
Operating lease expense	$ 1,081	$ 1,001
Cash payments on lease liabilities	$ 973	$ 1,141
Weighted-average remaining lease term	6 years 10 months 24 days	4 years 3 months 18 days
Weighted-average discount rate	6.03%	4.41%

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Operating Leases - Maturity Analysis of the Annual Undiscounted Cash Flows (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Lessee, Operating Lease, Liability, Payment, Due [Abstract]
2024	$ 3,156
2025	4,004
2026	3,393
2027	2,467
2028	2,212
Thereafter	7,967
Total lease payments	23,199
Less: imputed interest	4,908
Total operating lease liabilities	18,291	$ 18,969
Liabilities for leases that have not yet commenced	$ 3,500

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Contingencies - Warranty (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Commitments and Contingencies Disclosure [Abstract]
Standard product warranty length, minimum	1 year
Standard product warranty length, maximum	2 years
Limited product warranty length (up to)	10 years
Movement in Standard Product Warranty Accrual [Roll Forward]
Balance at beginning of period	$ 13,046	$ 13,926
Accruals for warranties issued	1,904	1,603
Warranty expenditures	(2,602)	(2,370)
Balance at end of period	$ 12,348	$ 13,159

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Contingencies - Litigation and Other Matters (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Loss Contingencies [Line Items]
Accrued amounts for litigation and other contingent liabilities	$ 8,973	$ 9,404
Performance Bonds
Loss Contingencies [Line Items]
Letters of credit secured using cash collateral	36,700
Outstanding performance bonds	$ 259,500

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Fair Value Measurements - Fair Value Assets Measured on a Non-recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan assets	$ 7,278	$ 6,495
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan assets	7,278	6,495
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan assets	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Deferred compensation plan assets	$ 0	$ 0

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Fair Value Measurements - Carrying Values and Estimated Fair Values of Other Financial Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023
Carrying Amount
Financial assets
Total financial assets	$ 9,174	$ 1,951
Financial liabilities
Notes payable	974,644	978,028
Carrying Amount | Senior Notes
Financial liabilities
Notes payable	899,791	903,691
Carrying Amount | Junior Subordinated Notes
Financial liabilities
Notes payable	74,853	74,337
Fair Value
Financial assets
Total financial assets	9,185	1,986
Financial liabilities
Notes payable	976,629	932,865
Fair Value | Senior Notes
Financial liabilities
Notes payable	901,776	858,528
Fair Value | Junior Subordinated Notes
Financial liabilities
Notes payable	$ 74,853	$ 74,337

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Income Taxes - Narrative (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Expense from income taxes	$ 1,181	$ 4,155

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Stock-based Compensation - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Share-Based Payment Arrangement [Abstract]
Stock-based compensation expense	$ 1,673	$ 1,580

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Stock-based Compensation - Stock Options Outstanding (Details) - Stock options	Dec. 31, 2023 $ / shares shares
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding [Roll Forward]
Exercisable at end of period (shares) | shares	13,475
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price [Abstract]
Exercisable at end of period (in USD per share) | $ / shares	$ 9.48

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Stock-based Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Dec. 31, 2023	Sep. 30, 2023
Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 0.1	$ 0.1
Time-based restricted stock | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	2 years
Time-based restricted stock | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years
Performance-Based Restricted Shares
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period	3 years
Nonvested Stock Awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Unrecognized compensation cost	$ 12.0	$ 6.9
Weighted average period to recognize remaining cost	2 years 1 month 17 days

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Stock-based Compensation - Restricted Stock Awards (Details) - shares	1 Months Ended	3 Months Ended
	Nov. 30, 2022	Dec. 31, 2023
Total Restricted Shares
Shares
Beginning of period (in shares)		942,057
Granted (in shares)		360,738
Vested (in shares)		(529,075)
Forfeited (in shares)		(8,248)
End of period (in shares)		765,472
Performance-Based Restricted Shares
Shares
Beginning of period (in shares)		348,223
Granted (in shares)		180,144
Vested (in shares)		(210,176)
Forfeited (in shares)		0
End of period (in shares)		318,191
Award vesting period		3 years
Performance based restricted stock settled in cash payment (in shares)	108,108
Time-based restricted stock
Shares
Beginning of period (in shares)		593,834
Granted (in shares)		180,594
Vested (in shares)		(318,899)
Forfeited (in shares)		(8,248)
End of period (in shares)		447,281

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Earnings Per Share - Schedule of Earnings Per Share. Basic and Dilutive (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Numerator:
Income from continuing operations	$ 21,728	$ 24,408
Loss from discontinued operations, net of tax	0	(77)
Net income	$ 21,728	$ 24,331
Denominator:
Basic weighted-average shares (in shares)	30,595	30,219
Dilutive effect of restricted stock awards (in shares)	379	257
Dilutive effect of stock options (in shares)	8	4
Dilutive weighted-average shares (in shares)	30,982	30,480
Basic income per share:
Continuing operations (in USD per share)	$ 0.71	$ 0.81
Discontinued operations (in USD per share)	0	0
Total (in USD per share)	0.71	0.81
Diluted income per share:
Continuing operations (in USD per share)	0.70	0.80
Discontinued operations (in USD per share)	0	0
Total (in USD per share)	$ 0.70	$ 0.80

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Earnings Per Share - Antidilutive Securities (Details) - shares shares in Thousands	3 Months Ended
	Dec. 31, 2023	Dec. 31, 2022
Stock options
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options (in shares)	0	13
Time-based restricted stock
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Stock options (in shares)	68	147

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Other Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2023	Sep. 30, 2023	Dec. 31, 2022	Sep. 30, 2022
Other Liabilities Disclosure [Abstract]
Accrued compensations and benefits	$ 24,133	$ 50,242
Customer deposits	27,018	27,577
Accrued interest	15,016	23,132
Warranty reserves	12,348	13,046	$ 13,159	$ 13,926
Litigation accruals	8,973	9,404
Income tax liabilities	2,705	272
Other	30,677	33,288
Total	$ 120,870	$ 156,961

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Segment Information (Details) $ in Thousands	3 Months Ended
	Dec. 31, 2023 USD ($) state region segment	Dec. 31, 2022 USD ($)	Sep. 30, 2023 USD ($)
Segment Reporting Information [Line Items]
Number of states in which home building segments operate | state	13
Number of regions in which entity operates | region	3
Number of reportable segments | segment	3
Revenue	$ 386,818	$ 444,928
Operating income	20,265	28,502
Depreciation and amortization	2,233	2,513
Capital expenditures	5,544	3,245
Assets	2,389,451		$ 2,411,033
Operating Segments
Segment Reporting Information [Line Items]
Operating income	43,835	57,298
Depreciation and amortization	1,840	2,208
Corporate and unallocated
Segment Reporting Information [Line Items]
Operating income	(23,570)	(28,796)
Depreciation and amortization	393	305
Capital expenditures	1,390	485
Assets	513,345		739,986
West
Segment Reporting Information [Line Items]
Revenue	237,093	274,815
West | Operating Segments
Segment Reporting Information [Line Items]
Operating income	28,339	37,357
Depreciation and amortization	1,311	1,605
Capital expenditures	3,600	1,510
Assets	1,124,278		994,597
East
Segment Reporting Information [Line Items]
Revenue	74,777	86,190
East | Operating Segments
Segment Reporting Information [Line Items]
Operating income	6,356	9,262
Depreciation and amortization	209	273
Capital expenditures	369	533
Assets	409,775		356,020
Southeast
Segment Reporting Information [Line Items]
Revenue	74,948	83,923
Southeast | Operating Segments
Segment Reporting Information [Line Items]
Operating income	9,140	10,679
Depreciation and amortization	320	330
Capital expenditures	185	$ 717
Assets	$ 342,053		$ 320,430

XML

Label	Element	Value
Employee Stock Option [Member]
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice	$ 9.61
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Weighted Average Exercise Price	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingWeightedAverageExercisePrice	$ 9.61
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber	13,575
Share-Based Compensation Arrangement by Share-Based Payment Award, Options, Outstanding, Number	us-gaap_ShareBasedCompensationArrangementByShareBasedPaymentAwardOptionsOutstandingNumber	13,575