ATLANTA--(BUSINESS WIRE)--Jul 30, 2020--
Beazer Homes USA, Inc. (NYSE: BZH) ( ) today announced its financial results for the three and nine months ended June 30, 2020.
“We generated very strong results in the third quarter, as improvements in home closings and margins allowed us to substantially improve profitability,” said Allan P. Merrill, Chairman and Chief Executive Officer of Beazer Homes. “After weathering difficult sales conditions in April, we experienced much stronger demand in the second half of the quarter, culminating in our best June sales month in more than ten years. We also took steps to adjust to the new operating environment by enhancing our liquidity, re-underwriting proposed land acquisition transactions and improving our cost structure. Looking forward, we’re optimistic about the prospects for new home demand as well as our ability to execute on our Balanced Growth strategy.”
Beazer Homes Fiscal Third Quarter 2020 Highlights and Comparison to Fiscal Third Quarter 2019
The following provides additional details on the Company's performance during the fiscal third quarter 2020:
. Third quarter net income from continuing operations was $15.3 million, generating diluted earnings per share of $0.51. This included impairment charges of $2.3 million and restructuring and severance charges of $1.4 million. Adjusted EBITDA of $54.0 million was up $15.3 million year-over-year.
. Net new orders for the third quarter decreased 11.1% year-over-year, to 1,372. The decrease in net new orders was driven by a decrease in the absorption rate to 2.7 sales per community per month, down from 3.0 in the previous year, and a decrease in average community count to 167, down from 174 in the previous year. Net orders improved sequentially each month with April orders down, May orders essentially flat, and June orders up more than 40% year-over-year. The cancellation rate for the quarter was 21.1%, up 590 basis points year-over-year. Early in the quarter, the cancellation rate spiked from a combination of declining orders and increasing cancellations. As conditions improved, the cancellation rate normalized, ending with a June cancellation rate of 13.9%.
. Third quarter closings rose 7.6% to 1,366 homes. Combined with a 2.6% increase in the average selling price to $389.8 thousand, homebuilding revenue was $532.5 million, up 10.4% year-over-year.
. The dollar value of homes in backlog as of June 30, 2020 was $884.9 million, or 2,237 homes, essentially flat compared to $881.6 million, or 2,264 homes, at the same time last year. The average selling price of homes in backlog was $395.6 thousand, up 1.6% year-over-year.
. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 21.2% for the third quarter, up 180 basis points year-over-year. The increase in homebuilding gross margin was primarily driven by margin improvement on spec homes and reduced incentives.
. Selling, general and administrative expenses as a percentage of total revenue was 11.7% for the quarter, down 50 basis points year-over-year.
. At the close of the third quarter, the Company had approximately $402.3 million of available liquidity, including $152.3 million of unrestricted cash and $250.0 million available on its secured revolving credit facility.
Succession Plan for Chief Financial Officer
The Company also announced the retirement and succession plans for Robert L. Salomon, Executive Vice President and Chief Financial Officer. Mr. Salomon has decided to retire after a 28-year career in homebuilding following the filing of the Company’s 10-K for the fiscal year ending September 30, 2020 in November. Mr. Salomon joined the Company as Chief Accounting Officer in February 2008 and was promoted to Executive Vice President and Chief Financial Officer in June 2011. Upon Mr. Salomon’s retirement, the Company will be appointing David I. Goldberg to serve as Senior Vice President and Chief Financial Officer. Mr. Goldberg currently serves as the Company’s Vice President and Treasurer, positions he has held since joining the Company in March 2015.
“Bob has been an indispensable part of our management team from the day he joined the Company,” said Mr. Merrill. “He’s been my valued business partner as well as a mentor to operational and corporate leaders across the Company. Since joining us, he has successfully led or managed our financial reporting, internal audit, business planning, capital markets and treasury activities, and in recent years he has overseen crucial corporate functions including land acquisition and information technology. While we will miss his contributions after the end of our fiscal year, he has established a deep and talented finance team, led by David Goldberg. I am very confident that David, working closely with our experienced Senior Leadership Team, will allow us to complete a smooth and successful leadership transition in fiscal 2021.”
Summary results for the three and nine months ended June 30, 2020 are as follows:
The Company will hold a conference call on July 30, 2020 at 5:00 p.m. ET to discuss these results. Interested parties may listen to the conference call and view the Company's slide presentation on the "Investor Relations" page of the Company's website, . In addition, the conference call will be available by telephone at 800-475-0542 (for international callers, dial 517-308-9429). To be admitted to the call, enter the pass code “8571348". A replay of the conference call will be available, until 10:00 PM ET on August 7, 2020 at 886-463-2180 (for international callers, dial 203-369-1377) with pass code “3740”.
Reconciliation of homebuilding gross profit and the related gross margin before impairments and abandonments and interest amortized to cost of sales to homebuilding gross profit and gross margin, the most directly comparable GAAP measure, 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.
Reconciliation of Adjusted EBITDA to total company net income (loss), the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective capitalization, tax position and level of impairments. These EBITDA measures should not be considered alternatives to net income (loss) determined in accordance with GAAP as an indicator of operating performance.
The reconciliation of Adjusted EBITDA to total company net income (loss) below differs from prior year, as it reclassifies stock-based compensation expense from an adjustment within EBITDA to an adjustment within Adjusted EBITDA in order to accurately present EBITDA per its definition.
View source version on businesswire.com:
CONTACT: Beazer Homes USA, Inc.
David I. Goldberg
Vice President of Treasury and Investor Relations
KEYWORD: GEORGIA UNITED STATES NORTH AMERICA
INDUSTRY KEYWORD: CONSTRUCTION & PROPERTY RESIDENTIAL BUILDING & REAL ESTATE
SOURCE: Beazer Homes USA, Inc.
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PUB: 07/30/2020 04:15 PM/DISC: 07/30/2020 04:15 PM