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Form 8-K BEAZER HOMES USA INC For: Jan 30

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January 30, 2015 8:39 AM EST


__________________________________________________________________________________________
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
�
�
FORM 8-K
�
�
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Date of Report (Date of earliest reported event): January�30, 2015
�
BEAZER HOMES USA, INC.
(Exact name of registrant as specified in its charter)
��
�
�
�
�
�
�
DELAWARE
�
001-12822
�
54-2086934
(State or other jurisdiction
of incorporation)
�
(Commission
File Number)
�
(IRS Employer
Identification No.)
1000 Abernathy Road, Suite 260
Atlanta Georgia 30328
(Address of Principal Executive Offices)
(770) 829-3700
(Registrants telephone number, including area code)
None
(Former name or former address, if changed since last report)
�
�
Check the appropriate box below if the Form�8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
�
�
Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
�
�
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
�
�
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
�
�
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
__________________________________________________________________________________________




Item�2.02.
Results of Operations and Financial Condition
On January�30, 2015, Beazer Homes USA, Inc. issued a press release announcing results of operations for the three months ended December�31, 2014. A copy of the press release is attached hereto as exhibit 99.1.

Item�9.01
Financial Statements and Exhibits
(d) Exhibits
�
99.1
Earnings Press Release dated January 30, 2015




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 hereunto duly authorized.
�
�
�
�
�
�
�
�
�
�
�
�
�
�
BEAZER HOMES USA, INC.
�
�
�
�
Date: January 30, 2015
�
�
�
By:
�
/s/ Kenneth F. Khoury
�
�
�
�
�
�
�
�
Kenneth F. Khoury Executive Vice President, Chief Administrative Officer and General Counsel




��
Exhibit 99.1
PRESS RELEASE

Beazer Homes Reports First Quarter Fiscal 2015 Results; Reiterates Full Year Adjusted EBITDA Expectations
"
Solid order and community count growth
"
Year-over-year margin improvement, excluding warranty charges
"
On track to reach 2B-10 by the end of fiscal 2016

ATLANTA, January�30, 2015 - Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three months ended December�31, 2014.

The Company reported a net loss from continuing operations of $18.1 million for the quarter ended December 31, 2014, compared with a net loss of $3.9 million for the quarter ended December 31, 2013. Excluding unexpected warranty charges of $13.6 million, as detailed below, the Companys net loss from continuing operations was $4.5 million.

The Company remains on track to meet its 2B-10 objectives to reach $2 billion in revenue with a 10 percent Adjusted EBITDA margin by the end of fiscal 2016. In the quarter ended December 31, 2014, orders were up 7.9 percent, average selling prices (ASP) were up $16 thousand, or 5.8 percent, the quarter-end community count was up 13 percent and homebuilding gross margins (excluding impairments, abandonments, interest amortized to cost of sales and the warranty charges) improved by 60 basis points.

Improvements in new home orders, ASP, community count and gross margins were all positive indicators of progress on our '2B-10' objectives, said Allan Merrill, CEO of Beazer Homes. A lower-than-expected backlog conversion rate and unexpected charges adversely impacted quarterly revenue and profitability. However, with an improving sales environment and the largest December 31st backlog value since 2007 we remain optimistic about our ability to achieve a $20 million improvement in Adjusted EBITDA for fiscal 2015, excluding the unexpected charges taken this quarter."
Warranty Charges
The Florida warranty charges referenced above are included in the Companys cost of sales and are associated with stucco installation issues that resulted in water intrusion problems in some of the homes in certain of the Companys communities located in Fort Myers and Tampa, Florida. Since first learning of these potential issues, the Company expanded its efforts to identify, examine and repair homes that may have been impacted. As a result, the Company recorded $13.6 million in warranty charges during its fiscal first quarter to cover the estimated remaining repair costs on homes already identified as having stucco installation issues as well as an estimate of repair costs that may arise from future warranty claims in these markets.
The Company believes it is likely that it will recover a portion of its repair costs, either from its direct insurers or from involved subcontractors or their insurers. However, the amount of any potential recovery is currently unknown and was therefore not included in any assessment of the overall warranty liability.





Summary results for the three months ended December�31, 2014 are as follows:

Q1 Results from Continuing Operations (unless otherwise specified)
�
�
Quarter Ended December 31,
�
�
2014
�
2013
�
Change
New Home Orders
�
966

�
895

�
7.9
�%
Orders per month per community
�
2.1

�
2.2

�
(4.5
)%
Actual community count at month-end
�
156

�
138

�
13.0
�%
Average active community count
�
154

�
138

�
11.6
�%
Cancellation rates
�
21.4
%
�
21.8
%
�
40 bps

�
�
�
�
�
�
�
Total Home Closings
�
885

�
1,038

�
(14.7
)%
Average sales price from closings (in thousands)
�
$
295.6

�
$
279.3

�
5.8
�%
Homebuilding revenue (in millions)
�
$
261.6

�
$
290.0

�
(9.8
)%
Homebuilding gross profit margin, excluding impairments and abandonments (I&A)
�
13.5
%
�
18.8
%
�
-530 bps

Homebuilding gross profit margin, excluding I&A and interest amortized to cost of sales
�
16.6
%
�
21.2
%
�
-460 bps

Homebuilding gross profit margin, excluding I&A, interest amortized to cost of sales and unexpected warranty costs
�
21.8
%
�
21.2
%
�
60 bps

�
�
�
�
�
�
�
Loss from continuing operations before income taxes (in millions)
�
$
(18.8
)
�
$
(3.9
)
�
$
(14.9
)
Benefit from income taxes (in millions)
�
$
(0.7
)
�
$


�
$
(0.7
)
Net loss from continuing operations (in millions)
�
$
(18.1
)
�
$
(3.9
)
�
$
(14.2
)
Basic Loss Per Share
�
$
(0.68
)
�
$
(0.16
)
�
$
(0.52
)
�
�
�
�
�
�
�
Total Company land and land development spending (in millions)
�
$
145.4

�
$
123.8

�
$
21.6

Total Company Adjusted EBITDA (in millions)
�
$
(1.3
)
�
$
21.6

�
$
(22.9
)
Total Company Adjusted EBITDA, excluding unexpected warranty costs and the accrual in discontinued operations (in millions)
�
$
16.3

�
$
21.6

�
$
(5.3
)
�
�
�
�
�
�
�
As of December 31, 2014
�
�
As of December 31,
�
�
2014
�
2013
�
Change
Backlog
�
1,771

�
1,750

�
1.2
�%
Dollar value of backlog at end of period (in millions)
�
$
560.5

�
$
500.0

�
12.1
�%
ASP in Backlog
�
$
316.5

�
$
285.7

�
10.8
�%
Land and lots controlled
�
27,908

�
28,978

�
(3.7
)%

Q1 Results from Discontinued Operations
The Company recorded a $4.3 million charge in discontinued operations (including $4.0 million related to an accrual for one construction defect case) resulting in a total net loss of $22.3 million for the quarter ended December 31, 2014.
Conference Call

The Company will hold a conference call on January 30, 2015 at 9:30 am ET to discuss these results. Interested parties may listen to the conference call and view the Company's slide presentation over the Internet by visiting the Investor Relations section of the Company's website at www.beazer.com. To access the conference call by telephone, listeners should dial 800-619-8639 (for international callers, dial 312-470-7002). To be admitted to the call, verbally supply the passcode "BZH". A replay of the call will be available shortly after the conclusion of the live call. To directly access the replay, dial 866-436-9398 or 203-369-1041 and enter the passcode 3740 (available until 10:59 pm ET on February 6, 2015), or visit www.beazer.com.� A replay of the webcast will be available at www.beazer.com for at least 30 days.





Headquartered in Atlanta, Beazer Homes is one of the country's 10 largest single-family homebuilders. The Company's homes meet or exceed the benchmark for energy-efficient home construction as established by ENERGY STAR� and are designed with Choice Plans to meet the personal preferences and lifestyles of its buyers. In addition, the Company is committed to providing a range of preferred lender choices to facilitate transparent competition between lenders and enhanced customer service. The Company offers homes in 16 states, namely Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, New Jersey, New York, North Carolina, Pennsylvania, South Carolina, Tennessee, Texas and Virginia. Beazer Homes is listed on the New York Stock Exchange under the ticker symbol BZH. For more info visit Beazer.com, or check out Beazer on Facebook 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: (i) the availability and cost of land and the risks associated with the future value of our inventory such as additional asset impairment charges or writedowns; (ii) economic changes nationally or in local markets, including changes in consumer confidence, declines in employment levels, inflation and increases in the quantity and decreases in the price of new homes and resale homes in the market; (iii) the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; (iv) estimates related to homes to be delivered in the future (backlog) are imprecise as they are subject to various cancellation risks which cannot be fully controlled; (v) shortages of or increased prices for labor, land or raw materials used in housing production; (vi) our cost of and ability to access capital and otherwise meet our ongoing liquidity needs including the impact of any downgrades of our credit ratings or reductions in our tangible net worth or liquidity levels; (vii) our ability to comply with covenants in our debt agreements or satisfy such obligations through repayment or refinancing; (viii) a substantial increase in mortgage interest rates, increased disruption in the availability of mortgage financing, a change in tax laws regarding the deductibility of mortgage interest, or an increased number of foreclosures; (ix) increased competition or delays in reacting to changing consumer preference in home design; (x) factors affecting margins such as decreased land values underlying land option agreements, increased land development costs on communities under development or delays or difficulties in implementing initiatives to reduce production and overhead cost structure; (xi) estimates related to the potential recoverability of our deferred tax assets; (xii) 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 and governmental policies; (xiii) the results of litigation or government proceedings and fulfillment of the obligations in the consent orders with governmental authorities and other settlement agreements; (xiv) the impact of construction defect and home warranty claims, including water intrusion issues in Florida and New Jersey; (xv) the cost and availability of insurance and surety bonds; (xvi) the performance of our unconsolidated entities and our unconsolidated entity partners; (xvii) delays in land development or home construction resulting from adverse weather conditions; (xviii) the impact of information technology failures or data security breaches; (xix) effects of changes in accounting policies, standards, guidelines or principles; or (xx) terrorist acts, acts of war and other factors over which the Company has little or no control.

Any forward-looking statement speaks only as of the date on which such statement is made, and, except as required by law, we do not undertake any obligation to update or revise any forward-looking statement, whether as a result of new information, future events or otherwise. New factors emerge from time to time and it is not possible for management to predict all such factors.

CONTACT: Beazer Homes USA, Inc.
Carey Phelps
Director, Investor Relations & Corporate Communications
770-829-3700
-Tables Follow-





BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
($ in thousands, except per share data)
�
Three Months Ended
�
December�31,
�
2014
�
2013
Total revenue
$
265,764

�
$
293,170

Home construction and land sales expenses
230,546

�
238,469

Inventory impairments and option contract abandonments


�
31

Gross profit
35,218

�
54,670

Commissions
10,926

�
11,821

General and administrative expenses
31,441

�
28,410

Depreciation and amortization
2,341

�
2,907

Operating (loss) income
(9,490
)
�
11,532

Equity in income of unconsolidated entities
142

�
319

Other expense, net
(9,434
)
�
(15,757
)
Loss from continuing operations before income taxes
(18,782
)
�
(3,906
)
(Benefit from) provision for income taxes
(696
)
�
42

Loss from continuing operations
(18,086
)
�
(3,948
)
Loss from discontinued operations, net of tax
(4,254
)
�
(1,190
)
Net loss
$
(22,340
)
�
$
(5,138
)
Weighted average number of shares:
�
�
�
Basic and Diluted
26,457

�
25,009

Basic and Diluted loss per share:
�
�
�
Continuing Operations
$
(0.68
)
�
$
(0.16
)
Discontinued Operations
$
(0.16
)
�
$
(0.05
)
Total
$
(0.84
)
�
$
(0.21
)

�
�
Three Months Ended
�
December 31,
�
2014
�
2013
Capitalized interest in inventory, beginning of period
$
87,619

�
$
52,562

Interest incurred
30,283

�
32,441

Interest expense not qualified for capitalization and included as other expense
(9,747
)
�
(16,032
)
Capitalized interest amortized to house construction and land sales expenses
(8,287
)
�
(7,135
)
Capitalized interest in inventory, end of period
$
99,868

�
$
61,836






BEAZER HOMES USA, INC.
UNAUDITED CONDENSED CONSOLIDATED BALANCE SHEETS
($ in thousands, except share and per share data)
�
�
December�31, 2014
�
September�30, 2014
ASSETS
�
�
�
�
Cash and cash equivalents
�
$
138,680

�
$
324,154

Restricted cash
�
64,092

�
62,941

Accounts receivable (net of allowance of $1,267 and $1,245, respectively)
�
32,316

�
34,429

Income tax receivable
�
46

�
46

Inventory
�
�
�
�
Owned inventory
�
1,677,611

�
1,557,496

Land not owned under option agreements
�
1,443

�
3,857

Total inventory
�
1,679,054

�
1,561,353

Investments in marketable securities and unconsolidated entities
�
34,735

�
38,341

Deferred tax assets, net
�
46

�
2,823

Property, plant and equipment, net
�
19,315

�
18,673

Other assets
�
21,102

�
23,460

Total assets
�
$
1,989,386

�
$
2,066,220

�
�
�
�
�
LIABILITIES AND STOCKHOLDERS EQUITY
�
�
�
�
Trade accounts payable
�
$
65,845

�
$
106,237

Other liabilities
�
127,542

�
142,516

Obligations related to land not owned under option agreements
�
1,248

�
2,916

Total debt (net of discounts of $4,209 and $4,399 respectively)
�
1,536,591

�
1,535,433

Total liabilities
�
$
1,731,226

�
$
1,787,102

�
�
�
�
�
Stockholders equity:
�
�
�
�
Preferred stock (par value $.01 per share, 5,000,000 shares authorized, no shares issued)
�
$


�
$


Common stock (par value $0.001 per share, 63,000,000 shares authorized, 27,448,293 and 27,173,421 issued and outstanding, respectively)
�
27

�
27

Paid-in capital
�
852,800

�
851,624

Accumulated deficit
�
(593,597
)
�
(571,257
)
Accumulated other comprehensive loss
�
(1,070
)
�
(1,276
)
Total stockholders equity
�
258,160

�
279,118

Total liabilities and stockholders equity
�
$
1,989,386

�
$
2,066,220

�
�
�
�
�
Inventory Breakdown
�
�
�
�
Homes under construction
�
$
325,074

�
$
282,095

Development projects in progress
�
811,021

�
786,768

Land held for future development
�
312,148

�
301,048

Land held for sale
�
68,358

�
51,672

Capitalized interest
�
99,868

�
87,619

Model homes
�
61,142

�
48,294

Land not owned under option agreements
�
1,443

�
3,857

Total inventory
�
$
1,679,054

�
$
1,561,353




�




BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA� CONTINUING OPERATIONS
($ in thousands, except otherwise noted)
�
�
Quarter Ended December 31,
SELECTED OPERATING DATA
�
2014
�
2013
Closings:
�
�
�
�
West region
�
316

�
435

East region
�
305

�
338

Southeast region
�
264

�
265

Total closings
�
885

�
1,038

�
�
�
�
�
New orders, net of cancellations:
�
�
�
�
West region
�
405

�
351

East region
�
286

�
308

Southeast region
�
275

�
236

Total new orders
�
966

�
895

�
�
�
�
�
Backlog units at end of period:
�
�
�
�
West region
�
646

�
654

East region
�
581

�
631

Southeast region
�
544

�
465

Total backlog units
�
1,771

�
1,750

�
�
�
�
�
Dollar value of backlog at end of period (in millions)
�
$
560.5

�
$
500.0

�
�
�
�
�
Homebuilding Revenue:
�
�
�
�
West region
�
$
86,318

�
$
120,212

East region
�
101,832

�
106,879

Southeast region
�
73,432

�
62,867

Total homebuilding revenue
�
$
261,582

�
$
289,958



�
�
Quarter Ended December 31,
SUPPLEMENTAL FINANCIAL DATA
�
2014
�
2013
Revenues:
�
�
�
�
Homebuilding
�
$
261,582

�
$
289,958

Land sales and other
�
4,182

�
3,212

Total
�
$
265,764

�
$
293,170

�
�
�
�
�
Gross profit (loss):
�
�
�
�
Homebuilding
�
$
35,277

�
$
54,450

Land sales and other
�
(59
)
�
220

Total
�
$
35,218

�
$
54,670





Reconciliation of homebuilding gross profit before impairments and abandonments and interest amortized to cost of sales and the related gross margins 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.
In addition, given the unusual size and nature of charges recorded during the quarter ended December 31, 2014, homebuilding gross profit is also shown excluding these charges. Management believes that this representation best reflects the operating characteristics of the company.
�
Quarter Ended December 31,
�
2014
�
2013
Homebuilding gross profit
$
35,277

13.5
%
�
$
54,450

18.8
%
Inventory impairments and lot option abandonments (I&A)


�
�
31

�
Homebuilding gross profit before I&A
35,277

13.5
%
�
54,481

18.8
%
Interest amortized to cost of sales
8,194

�
�
7,135

�
Homebuilding gross profit before I&A and interest amortized to cost of sales
43,471

16.6
%
�
61,616

21.2
%
Unexpected warranty costs
13,582

�
�


�
Homebuilding gross profit before I&A, interest amortized to cost of sales and unexpected warranty costs
$
57,053

21.8
%
�
$
61,616

21.2
%
Reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, debt extinguishment, impairments and abandonments) to total company net 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.
In addition, given the unusual size and nature of charges recorded during the quarter ended December 31, 2014, Adjusted EBITDA is also shown excluding these charges. Management believes that this representation best reflects the operating characteristics of the company.
�
�
Quarter Ended December 31,
�
�
2014
�
2013
Net loss
�
$
(22,340
)
�
$
(5,138
)
(Benefit from) provision for income taxes
�
(697
)
�
52

Interest amortized to home construction and land sales expenses, capitalized interest impaired, and interest expense not qualified for capitalization
�
18,034

�
23,167

Depreciation and amortization and stock compensation amortization
�
3,715

�
3,516

Inventory impairments and option contract abandonments
�


�
31

Adjusted EBITDA
�
$
(1,288
)
�
$
21,628

Unexpected warranty costs and discontinued operations accrual
�
17,582

�


Adjusted EBITDA excluding unexpected warranty costs and discontinued operations accrual
�
$
16,294

�
$
21,628

�








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