BZH Beazer Homes USA Inc New

Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three and six months ended March 31, 2024.

"Beazer delivered another successful quarter with strong sales, solid margins and growth in both our community count and our lot position," said Allan P. Merrill, the company’s Chairman and Chief Executive Officer. "The combination of these factors and our careful management of overheads enabled us to generate nearly $59 million in adjusted EBITDA."

Commenting on current market conditions, Mr. Merrill said, "While affordability remains challenging, especially in light of the recent increase in mortgage rates, the relatively strong economy and lack of resale inventory leave us on track to achieve our full year profitability and double-digit return on equity goals for the fiscal year."

Looking further out, Mr. Merrill concluded, "We remain optimistic for the years ahead given the persistent undersupply of housing and our consistent advancement towards our multi-year goals. Further growth in community count, combined with reductions in leverage and the full implementation of our Zero Energy Ready program should position us to generate durable value for our shareholders."

Beazer Homes Fiscal Second Quarter 2024 Highlights and Comparison to Fiscal Second Quarter 2023

• Net income from continuing operations was $39.2 million, or $1.26 per diluted share, compared to net income from continuing operations of $34.7 million, or $1.13 per diluted share, in fiscal second quarter 2023
• Adjusted EBITDA was $58.8 million, down 5.4%
• Homebuilding revenue was $538.6 million, down 0.6% on a 1.8% decrease in home closings to 1,044, partially offset by a 1.2% increase in average selling price (ASP) to $515.9 thousand
• Homebuilding gross margin was 18.7%, flat compared to a year ago. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 21.7%, down 30 basis points
• SG&A as a percentage of total revenue was 11.5%, up 30 basis points
• Net new orders were 1,299, up 10.0% on a 13.8% increase in average community count to 140, partially offset by a 3.3% decrease in orders per community per month to 3.1
• Backlog dollar value was $1.08 billion, up 8.9% on a 10.1% increase in backlog units to 2,046, partially offset by a 1.1% decrease in ASP of homes in backlog to $525.5 thousand
• Land acquisition and land development spending was $197.8 million, up 75.0% from $113.0 million
• Unrestricted cash at quarter end was $132.9 million; total liquidity was $432.9 million
• Refinanced $197.9 million of its 6.750% Senior Unsecured Notes due 2025 through the issuance of $250.0 million of 7.500% Senior Unsecured Notes due 2031
• Extended the maturity of its $300.0 million Senior Unsecured Revolving Credit Facility to March 2028
• Total debt to total capitalization ratio of 46.8% at quarter end compared to 49.7% a year ago. Net debt to net capitalization ratio of 43.4% at quarter end compared to 42.7% a year ago

The following provides additional details on the Company's performance during the fiscal second quarter 2024:

Profitability. Net income from continuing operations was $39.2 million, generating diluted earnings per share of $1.26. This included an $8.6 million, or $0.28 per diluted share, one-time gain on sale of investment in a technology company specializing in digital marketing for new home communities. Second quarter adjusted EBITDA of $58.8 million, which excludes the one-time gain on sale of investment, was down $3.3 million, or 5.4%, primarily due to lower homebuilding gross profit.

Orders. Net new orders for the second quarter increased to 1,299, up 10.0% from 1,181 in the prior year quarter primarily driven by a 13.8% increase in average community count to 140 from 123 a year ago, partially offset by a 3.3% decrease in sales pace to 3.1 orders per community per month, down from 3.2 in the prior year quarter. The cancellation rate for the quarter was 12.2%, down from 18.6% in the prior year quarter.

Backlog. The dollar value of homes in backlog as of March 31, 2024 was $1.08 billion, representing 2,046 homes, compared to $987.2 million, representing 1,858 homes, at the same time last year. The ASP of homes in backlog was $525.5 thousand, down 1.1% versus the prior year quarter.

Homebuilding Revenue. Second quarter homebuilding revenue was $538.6 million, down 0.6% year-over-year. The decrease in homebuilding revenue was driven by a 1.8% decrease in home closings to 1,044 homes, partially offset by a 1.2% increase in the ASP to $515.9 thousand. The decrease in closings was primarily due to a lower volume of spec homes sold and delivered within the current quarter compared to the prior year quarter.

Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 21.7% for the second quarter, down from 22.0% in the prior year quarter as a result of changes in product and community mix and an increase in closing cost incentives, partially offset by a decrease in build costs.

SG&A Expenses. Selling, general and administrative expenses as a percentage of total revenue was 11.5% for the quarter, up 30 basis points year-over-year primarily due to higher sales and marketing costs as the Company prepares for new community activations and future growth, as well as a slight decrease in homebuilding revenue.

Land Position. For the current fiscal quarter, land acquisition and land development spending was $197.8 million, up 75.0% year-over-year. Controlled lots increased 12.9% to 26,887, compared to 23,820 from the prior year quarter. Excluding land held for future development and land held for sale lots, active lots controlled were 26,218, up 13.5% year-over-year. As of March 31, 2024, the Company controlled 51.6% of its total active lots through option agreements compared to 54.0% as of March 31, 2023.

Liquidity. At the close of the second quarter, the Company had $432.9 million of available liquidity, including $132.9 million of unrestricted cash and $300.0 million of remaining capacity under the unsecured revolving credit facility, compared to total available liquidity of $505.8 million a year ago. In March, the Company issued $250.0 million of 7.500% Senior Unsecured Notes due 2031. The proceeds were used to redeem the remaining $197.9 million of the Company's 6.750% Senior Notes due 2025. In addition, the Company extended the maturity under its existing $300.0 million Senior Unsecured Revolving Credit Facility to March 2028.

Commitment to ESG Initiatives

During the quarter, the Company demonstrated its continued leadership and commitment to advancing ESG.

Beazer Homes received the ENERGY STAR Partner of the Year Award with Sustained Excellence for the ninth consecutive year. This award highlights the Company’s dedication to continually enhancing the energy efficiency of its homes in support of its industry-first pledge that, by the end of 2025, every new home that we start will be Zero Energy Ready, which means it will meet the requirements of the U.S. Department of Energy’s Zero Energy Ready Home program. By the end of the second quarter, the Company had Zero Energy Ready homes under construction in every division, consisting of 77% of new home starts. This represents a significant increase from the 54% achieved last quarter and the 28% from the prior year quarter.

In addition, the Company earned the 2024 Top Workplaces USA award for the second consecutive year, placing fifth among companies headquartered in Georgia on the list published by USA Today. Participating companies are measured on anonymous employee feedback comparing the survey’s research-based statements, including 15 Culture Drivers that are proven to predict high performance against industry benchmarks.

Further, the Company was recognized on Newsweek’s list of America’s Most Trustworthy Companies in America for the third year in a row. This award identified companies based on an independent survey of approximately 25,000 U.S. residents who rated companies they knew from the perspective of customers, investors and employees.

Finally, Beazer Homes announced the donation of $1.9 million to Fisher House Foundation, representing extensive fundraising efforts by Beazer Homes employees, generous contributions from its partners, and a 150% match by the Beazer Charity Foundation for all donations. For more than 25 years, the Fisher House has been providing “a home away from home” for military and veterans’ families to stay free of charge, while a loved one is receiving treatment at major military and VA medical centers.

Summary results for the three and six months ended March 31, 2024 are as follows:

 

Three Months Ended March 31,

 

 

2024

 

 

 

2023

 

 

Change*

New home orders, net of cancellations

 

1,299

 

 

 

1,181

 

 

10.0

%

Cancellation rates

 

12.2

%

 

 

18.6

%

 

(640) bps

Orders per community per month

 

3.1

 

 

 

3.2

 

 

(3.3

)%

Average active community count

 

140

 

 

 

123

 

 

13.8

%

Active community count at quarter-end

 

145

 

 

 

121

 

 

19.8

%

Land acquisition and land development spending (in millions)

$

197.8

 

 

$

113.0

 

 

75.0

%

 

 

 

 

 

 

Total home closings

 

1,044

 

 

 

1,063

 

 

(1.8

)%

ASP from closings (in thousands)

$

515.9

 

 

$

509.9

 

 

1.2

%

Homebuilding revenue (in millions)

$

538.6

 

 

$

542.0

 

 

(0.6

)%

Homebuilding gross margin

 

18.7

%

 

 

18.7

%

 

0 bps

Homebuilding gross margin, excluding impairments and abandonments (I&A)

 

18.7

%

 

 

18.8

%

 

(10) bps

Homebuilding gross margin, excluding I&A and interest amortized to cost of sales

 

21.7

%

 

 

22.0

%

 

(30) bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

45.9

 

 

$

39.8

 

 

15.4

%

Expense from income taxes (in millions)

$

6.7

 

 

$

5.1

 

 

32.3

%

Income from continuing operations, net of tax (in millions)

$

39.2

 

 

$

34.7

 

 

12.9

%

Basic income per share from continuing operations

$

1.27

 

 

$

1.14

 

 

11.4

%

Diluted income per share from continuing operations

$

1.26

 

 

$

1.13

 

 

11.5

%

 

 

 

 

 

 

Net income (in millions)

$

39.2

 

 

$

34.7

 

 

12.9

%

Adjusted EBITDA (in millions)

$

58.8

 

 

$

62.1

 

 

(5.4

)%

LTM Adjusted EBITDA (in millions)

$

259.6

 

 

$

340.9

 

 

(23.9

)%

Total debt to total capitalization ratio

 

46.8

%

 

 

49.7

%

 

(290) bps

Net debt to net capitalization ratio

 

43.4

%

 

 

42.7

%

 

70 bps

* Change and totals are calculated using unrounded numbers.

"LTM" indicates amounts for the trailing 12 months.

 

Six Months Ended March 31,

 

 

2024

 

 

 

2022

 

 

Change*

New home orders, net of cancellations

 

2,122

 

 

 

1,663

 

 

27.6

%

Cancellation rates

 

15.0

%

 

 

25.0

%

 

(1,000) bps

LTM orders per community per month

 

2.7

 

 

 

2.2

 

 

22.7

%

Land acquisition and land development spending (in millions)

$

396.5

 

 

$

227.7

 

 

74.1

%

 

 

 

 

 

 

Total home closings

 

1,787

 

 

 

1,896

 

 

(5.7

)%

ASP from closings (in thousands)

$

514.6

 

 

$

520.1

 

 

(1.1

)%

Homebuilding revenue (in millions)

$

919.6

 

 

$

986.1

 

 

(6.7

)%

Homebuilding gross margin

 

19.2

%

 

 

18.9

%

 

30 bps

Homebuilding gross margin, excluding I&A

 

19.2

%

 

 

19.0

%

 

20 bps

Homebuilding gross margin, excluding I&A and interest amortized to cost of sales

 

22.2

%

 

 

22.1

%

 

10 bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

68.8

 

 

$

68.4

 

 

0.7

%

Expense from income taxes (in millions)

$

7.9

 

 

$

9.2

 

 

(14.4

)%

Income from continuing operations, net of tax (in millions)

$

60.9

 

 

$

59.1

 

 

3.0

%

Basic income per share from continuing operations

$

1.98

 

 

$

1.94

 

 

2.1

%

Diluted income per share from continuing operations

$

1.96

 

 

$

1.93

 

 

1.6

%

 

 

 

 

 

 

Net income (in millions)

$

60.9

 

 

$

59.0

 

 

3.2

%

Adjusted EBITDA (in millions)

$

96.8

 

 

$

109.3

 

 

(11.4

)%

* Change and totals are calculated using unrounded numbers.

 "LTM" indicates amounts for the trailing 12 months.

 

As of March 31,

 

2024

 

2023

 

Change

Backlog units

 

2,046

 

 

1,858

 

10.1

%

Dollar value of backlog (in millions)

$

1,075.1

 

$

987.2

 

8.9

%

ASP in backlog (in thousands)

$

525.5

 

$

531.3

 

(1.1

)%

Land and lots controlled

 

26,887

 

 

23,820

 

12.9

%

Conference Call

The Company will hold a conference call on May 1, 2024 at 5:00 p.m. ET to discuss these results. Interested parties may listen to the conference call and view the Company's slide presentation on the "Investor Relations" page of the Company's website, www.beazer.com. In addition, the conference call will be available by telephone at 800-475-0542 (for international callers, dial 630-395-0227). To be admitted to the call, enter the pass code “8571348". A replay of the conference call will be available, until 11:59 PM ET on May 31, 2024 at 800-839-2204 (for international callers, dial 203-369-3032) with pass code “3740”.

About Beazer Homes

Headquartered in Atlanta, Beazer Homes (NYSE: BZH) is one of the country’s largest homebuilders. Every Beazer home is designed and built to provide Surprising Performance, giving you more quality and more comfort from the moment you move in – saving you money every month. With Beazer's Choice Plans™, you can personalize your primary living areas – giving you a choice of how you want to live in the home, at no additional cost. And unlike most national homebuilders, we empower our customers to shop and compare loan options. Our Mortgage Choice program gives you the resources to easily compare multiple loan offers and choose the best lender and loan offer for you, saving you thousands over the life of your loan.

We build our homes in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia. For more information, visit beazer.com, or check out Beazer on Facebook, Instagram and Twitter.

This press release contains forward-looking statements. These forward-looking statements represent our expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, among other things:

• 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, including those resulting from regulatory guidance and interpretations issued with respect thereto, such as the IRS's recent guidance regarding heightened qualification requirements for federal credits for building energy-efficient homes;
• 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;
• 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.

-Tables Follow-

 

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

Three Months Ended

 

Six Months Ended

 

March 31,

 

March 31,

in thousands (except per share data)

 

2024

 

 

2023

 

 

2024

 

 

 

2023

 

Total revenue

$

541,540

 

 

$

543,908

 

$

928,358

 

 

$

988,836

 

Home construction and land sales expenses

 

439,687

 

 

 

440,901

 

 

748,775

 

 

 

799,871

 

Inventory impairments and abandonments

 

—

 

 

 

111

 

 

—

 

 

 

301

 

Gross profit

 

101,853

 

 

 

102,896

 

 

179,583

 

 

 

188,664

 

Commissions

 

18,285

 

 

 

18,305

 

 

31,531

 

 

 

32,410

 

General and administrative expenses

 

44,004

 

 

 

42,779

 

 

85,990

 

 

 

83,427

 

Depreciation and amortization

 

3,573

 

 

 

3,020

 

 

5,806

 

 

 

5,533

 

Operating income

 

35,991

 

 

 

38,792

 

 

56,256

 

 

 

67,294

 

Loss on extinguishment of debt, net

 

(424

)

 

 

—

 

 

(437

)

 

 

(515

)

Other income, net

 

10,343

 

 

 

1,007

 

 

13,000

 

 

 

1,583

 

Income from continuing operations before income taxes

 

45,910

 

 

 

39,799

 

 

68,819

 

 

 

68,362

 

Expense from income taxes

 

6,739

 

 

 

5,092

 

 

7,920

 

 

 

9,247

 

Income from continuing operations

 

39,171

 

 

 

34,707

 

 

60,899

 

 

 

59,115

 

Loss from discontinued operations, net of tax

 

—

 

 

 

—

 

 

—

 

 

 

(77

)

Net income

$

39,171

 

 

$

34,707

 

$

60,899

 

 

$

59,038

 

Weighted-average number of shares:

 

 

 

 

 

 

 

Basic

 

30,769

 

 

 

30,394

 

 

30,681

 

 

 

30,464

 

Diluted

 

31,133

 

 

 

30,610

 

 

31,064

 

 

 

30,702

 

Basic income per share:

 

 

 

 

 

 

 

Continuing operations

$

1.27

 

 

$

1.14

 

$

1.98

 

 

$

1.94

 

Discontinued operations

 

—

 

 

 

—

 

 

—

 

 

 

—

 

Total

$

1.27

 

 

$

1.14

 

$

1.98

 

 

$

1.94

 

Diluted income per share:

 

 

 

 

 

 

 

Continuing operations

$

1.26

 

 

$

1.13

 

$

1.96

 

 

$

1.93

 

Discontinued operations

 

—

 

 

 

—

 

 

—

 

 

 

—

 

Total

$

1.26

 

 

$

1.13

 

$

1.96

 

 

$

1.93

 

 

Three Months Ended

 

Six Months Ended

 

March 31,

 

March 31,

Capitalized Interest in Inventory

 

2024

 

 

 

2023

 

 

2024

 

 

2023

 

Capitalized interest in inventory, beginning of period

$

119,596

 

 

$

113,143

 

 

$

112,580

 

$

109,088

 

Interest incurred

 

19,689

 

 

 

18,034

 

 

 

37,895

 

 

35,864

 

Capitalized interest amortized to home construction and land sales expenses

 

(16,071

)

 

 

(17,291

)

 

 

27,261

 

 

(31,066

)

Capitalized interest in inventory, end of period

$

123,214

 

 

$

113,886

 

 

$

123,214

 

$

113,886

 

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

in thousands (except share and per share data)

March 31, 2024

 

September 30, 2023

ASSETS

 

 

 

Cash and cash equivalents

$

132,867

 

$

345,590

Restricted cash

 

32,527

 

 

40,699

Accounts receivable (net of allowance of $284 and $284, respectively)

 

54,226

 

 

45,598

Income tax receivable

 

246

 

 

—

Owned inventory

 

2,057,461

 

 

1,756,203

Deferred tax assets, net

 

132,521

 

 

133,949

Property and equipment, net

 

36,839

 

 

31,144

Operating lease right-of-use assets

 

15,867

 

 

17,398

Goodwill

 

11,376

 

 

11,376

Other assets

 

41,480

 

 

29,076

Total assets

$

2,515,410

 

$

2,411,033

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Trade accounts payable

$

168,669

 

$

154,256

Operating lease liabilities

 

17,543

 

 

18,969

Other liabilities

 

144,310

 

 

156,961

Total debt (net of debt issuance costs of $9,314 and $5,759, respectively)

 

1,023,311

 

 

978,028

Total liabilities

 

1,353,833

 

 

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, 31,547,284 issued and outstanding and 31,351,434 issued and outstanding, respectively)

 

32

 

 

31

Paid-in capital

 

862,636

 

 

864,778

Retained earnings

 

298,909

 

 

238,010

Total stockholders’ equity

 

1,161,577

 

 

1,102,819

Total liabilities and stockholders’ equity

$

2,515,410

 

$

2,411,033

 

 

 

 

Inventory Breakdown

 

 

 

Homes under construction

$

851,278

 

$

644,363

Land under development

 

951,221

 

 

870,740

Land held for future development

 

19,879

 

 

19,879

Land held for sale

 

18,264

 

 

18,579

Capitalized interest

 

123,214

 

 

112,580

Model homes

 

93,605

 

 

90,062

Total owned inventory

$

2,057,461

 

$

1,756,203

BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS

 

Three Months Ended March 31,

 

Six Months Ended March 31,

SELECTED OPERATING DATA

2024

 

2023

 

2024

 

2023

Closings:

 

 

 

 

 

 

 

West region

667

 

631

 

1,121

 

1,141

East region

215

 

236

 

351

 

391

Southeast region

162

 

196

 

315

 

364

Total closings

1,044

 

1,063

 

1,787

 

1,896

 

 

 

 

 

 

 

 

New orders, net of cancellations:

 

 

 

 

 

 

 

West region

860

 

631

 

1,393

 

879

East region

263

 

296

 

435

 

416

Southeast region

176

 

254

 

294

 

368

Total new orders, net

1,299

 

1,181

 

2,122

 

1,663

 

As of March 31,

Backlog units:

2024

 

2023

West region

 

1,305

 

 

995

East region

 

407

 

 

435

Southeast region

 

334

 

 

428

Total backlog units

 

2,046

 

 

1,858

Aggregate dollar value of homes in backlog (in millions)

$

1,075.1

 

$

987.2

ASP in backlog (in thousands)

$

525.5

 

$

531.3

in thousands

Three Months Ended March 31,

 

Six Months Ended March 31,

SUPPLEMENTAL FINANCIAL DATA

2024

 

2023

 

2024

 

2023

Homebuilding revenue:

 

 

 

 

 

 

 

West region

$

344,864

 

$

328,961

 

$

579,273

 

$

603,283

East region

 

111,631

 

 

119,869

 

 

183,384

 

 

205,900

Southeast region

 

82,141

 

 

93,177

 

 

156,898

 

 

176,908

Total homebuilding revenue

$

538,636

 

$

542,007

 

$

919,555

 

$

986,091

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Homebuilding

$

538,636

 

$

542,007

 

$

919,555

 

$

986,091

Land sales and other

 

2,904

 

 

1,901

 

 

8,803

 

 

2,745

Total revenue

$

541,540

 

$

543,908

 

$

928,358

 

$

988,836

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

Homebuilding

$

100,774

 

$

101,588

 

$

176,717

 

$

186,702

Land sales and other

 

1,079

 

 

1,308

 

 

2,866

 

 

1,962

Total gross profit

$

101,853

 

$

102,896

 

$

179,583

 

$

188,664

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 March 31,

 

Six Months Ended March 31,

in thousands

2024

 

2023

 

2024

 

2023

Homebuilding gross profit/margin

$

100,774

18.7

%

 

$

101,588

18.7

%

 

$

176,717

19.2

%

 

$

186,702

18.9

%

Inventory impairments and abandonments (I&A)

 

—

 

 

 

111

 

 

 

—

 

 

 

301

 

Homebuilding gross profit/margin excluding I&A

 

100,774

18.7

%

 

 

101,699

18.8

%

 

 

176,717

19.2

%

 

 

187,003

19.0

%

Interest amortized to cost of sales

 

16,071

 

 

 

17,291

 

 

 

27,261

 

 

 

31,066

 

Homebuilding gross profit/margin excluding I&A and interest amortized to cost of sales

$

116,845

21.7

%

 

$

118,990

22.0

%

 

$

203,978

22.2

%

 

$

218,069

22.1

%

Reconciliation of Adjusted EBITDA (a non-GAAP financial measure) to total company net income, the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing core operating results and underlying business trends by eliminating many of the differences in companies' respective capitalization, tax position, level of impairments, and other non-recurring items. This non-GAAP financial measure may not be comparable to other similarly titled measures of other companies and should not be considered in isolation or as a substitute for, or superior to, financial measures prepared in accordance with GAAP.

 

Three Months Ended March 31,

 

Six Months Ended March 31,

 

LTM Ended March 31,(a)

in thousands

 

2024

 

 

 

2023

 

 

2024

 

 

 

2023

 

 

2024

 

 

 

2023

Net income

$

39,171

 

 

$

34,707

 

$

60,899

 

 

$

59,038

 

$

160,472

 

 

$

200,185

Expense from income taxes

 

6,739

 

 

 

5,092

 

 

7,920

 

 

 

9,225

 

 

22,631

 

 

 

45,961

Interest amortized to home construction and land sales expenses and capitalized interest impaired

 

16,071

 

 

 

17,291

 

 

27,261

 

 

 

31,066

 

 

64,684

 

 

 

72,261

EBIT

 

61,981

 

 

 

57,090

 

 

96,080

 

 

 

99,329

 

 

247,787

 

 

 

318,407

Depreciation and amortization

 

3,573

 

 

 

3,020

 

 

5,806

 

 

 

5,533

 

 

12,471

 

 

 

12,981

EBITDA

 

65,554

 

 

 

60,110

 

 

101,886

 

 

 

104,862

 

 

260,258

 

 

 

331,388

Stock-based compensation expense

 

1,389

 

 

 

1,678

 

 

3,062

 

 

 

3,258

 

 

7,079

 

 

 

7,204

Loss on extinguishment of debt

 

424

 

 

 

—

 

 

437

 

 

 

515

 

 

468

 

 

 

42

Inventory impairments and abandonments(b)

 

—

 

 

 

111

 

 

—

 

 

 

301

 

 

340

 

 

 

1,890

Gain on sale of investment(c)

 

(8,591

)

 

 

—

 

 

(8,591

)

 

 

—

 

 

(8,591

)

 

 

—

Severance expenses

 

—

 

 

 

224

 

 

—

 

 

 

335

 

 

—

 

 

 

335

Adjusted EBITDA

$

58,776

 

 

$

62,123

 

$

96,794

 

 

$

109,271

 

$

259,554

 

 

$

340,859

(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."

(c)

We previously held a minority interest in a technology company specializing in digital marketing for new home communities, which was sold during the quarter ended March 31, 2024. In exchange for the previously held investment, we received cash in escrow along with a minority partnership interest in the acquiring company, which was recorded within other assets in our condensed consolidated balance sheets. The resulting gain of $8.6 million from this transaction was recognized in other income, net on our condensed consolidated statement of operations. The Company believes excluding this one-time gain from Adjusted EBITDA provides a better reflection of the Company's performance as this item is not representative of our core operations.

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 March 31, 2024

 

As of March 31, 2023

Total debt

$

1,023,311

 

 

$

985,220

 

Stockholders' equity

 

1,161,577

 

 

 

998,985

 

Total capitalization

$

2,184,888

 

 

$

1,984,205

 

Total debt to total capitalization ratio

 

46.8

%

 

 

49.7

%

 

 

 

 

Total debt

$

1,023,311

 

 

$

985,220

 

Less: cash and cash equivalents

 

132,867

 

 

 

240,829

 

Net debt

 

890,444

 

 

 

744,391

 

Stockholders' equity

 

1,161,577

 

 

 

998,985

 

Net capitalization

$

2,052,021

 

 

$

1,743,376

 

Net debt to net capitalization ratio

 

43.4

%

 

 

42.7

%

 

View source version on businesswire.com: https://www.businesswire.com/news/home/20240501588573/en/

Beazer Homes USA, Inc. David I. Goldberg Sr. Vice President & Chief Financial Officer 770-829-3700 investor.relations@beazer.com