Beazer Homes Reports Strong Third Quarter Fiscal 2017 Results
“We were very pleased with our third quarter results, as we generated
growth in EBITDA and earnings per share, driven by operational
improvements across our business,” said
Mr. Merrill continued, “Beyond this year, we are poised for further earnings growth and reductions in leverage, driven by an improving return on capital and the continued rollout of our Gatherings business.”
The Company generated net income of
Beazer Homes Fiscal Third Quarter 2017 Highlights and Comparison to Fiscal Third Quarter 2016:
-
Adjusted EBITDA was
$44.3 million . This was up$6.0 million , excluding the benefit from insurance recoveries in the prior year -
Homebuilding revenue was
$472.4 million , higher by 4.7% due to a 1.7% increase in home closings and a 3.0% increase in average selling price - Homebuilding gross margin, excluding interest, impairments and abandonments and additional insurance recoveries in the prior year, was 21.3%, up 60 basis points. The improvement was driven by higher margins on spec home closings and lower than anticipated warranty costs
Other Operational Highlights:
- Sales per community per month of 3.4, up 14.2%
- New home orders, net of 1,595, up 7.0%
-
Dollar value of homes in backlog of
$859.9 million , up 5.6%, driven by an increase in the average selling price of homes in backlog of$351.8 thousand , up$16 thousand - Selling, general and administrative expenses (SG&A) as a percentage of total revenue was 12.4%, an improvement of 20 basis points
-
Land and land development spending of
$103.8 million , up 43.1% -
Total available liquidity at quarter end of
$308.5 million , including$168.4 million of unrestricted cash and$140.1 million available on the Company’s revolving credit facility
Gatherings Update
During the third quarter, the Company started vertical construction at
its first Orlando Gatherings community in the
So far this fiscal year, the Company has approved four new communities representing nearly 300 future sales and is currently reviewing a pipeline of potential communities that exceeds 2,000 homes.
Summary results for the three and nine months ended June 30, 2017 are as follows:
Three Months Ended June 30, | ||||||||||||||||
2017 | 2016 | Change* | ||||||||||||||
New home orders, net of cancellations | 1,595 | 1,490 | 7.0 | % | ||||||||||||
Orders per community per month | 3.4 | 3.0 | 14.2 | % | ||||||||||||
Average active community count | 155 | 166 | (6.2 | )% | ||||||||||||
Actual community count at quarter-end | 154 | 168 | (8.3 | )% | ||||||||||||
Cancellation rates | 16.9 | % | 19.6 | % | -270 bps | |||||||||||
Total home closings | 1,387 | 1,364 | 1.7 | % | ||||||||||||
Average selling price (ASP) from closings (in thousands) | $ | 340.6 | $ | 330.6 | 3.0 | % | ||||||||||
Homebuilding revenue (in millions) | $ | 472.4 | $ | 451.0 | 4.7 | % | ||||||||||
Homebuilding gross margin | 16.7 | % | 17.0 | % | -30 bps | |||||||||||
Homebuilding gross margin, excluding impairments and abandonments (I&A) | 16.7 | % | 19.7 | % | -300 bps | |||||||||||
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 21.3 | % | 24.1 | % | -280 bps | |||||||||||
Homebuilding gross margin, excluding I&A, interest amortized to cost of sales and additional insurance recoveries from third-party insurer | 21.3 | % | 20.7 | % | 60 bps | |||||||||||
Income from continuing operations before income taxes (in millions) | $ | 12.9 | $ | 11.5 | $ | 1.4 | ||||||||||
Provision for income taxes (in millions) | $ | 5.7 | $ | 5.3 | $ | 0.4 | ||||||||||
Income from continuing operations (in millions)* | $ | 7.1 | $ | 6.1 | $ | 1.0 | ||||||||||
Basic and diluted income per share from continuing operations | $ | 0.22 | $ | 0.19 | $ | 0.03 | ||||||||||
Income from continuing operations before income taxes (in millions) | $ | 12.9 | $ | 11.5 | $ | 1.4 | ||||||||||
Gain on debt extinguishment (in millions) | $ | — | $ | 0.4 | $ | (0.4 | ) | |||||||||
Inventory impairments and abandonments (in millions) | $ | 0.5 | $ | 11.9 | $ | (11.4 | ) | |||||||||
Additional insurance recoveries from third-party insurer (in millions) | $ | — | $ | 15.5 | $ | (15.5 | ) | |||||||||
Income from continuing operations excluding gain on debt extinguishment, inventory impairments and abandonments and additional insurance recoveries before income taxes (in millions)* | $ | 13.3 | $ | 7.4 | $ | 5.9 | ||||||||||
Net income | $ | 7.1 | $ | 5.8 | $ | 1.3 | ||||||||||
Net income excluding gain on debt extinguishment, inventory impairments and abandonments and additional insurance recoveries (in millions)* + | $ | 7.4 | $ | 4.0 | $ | 3.4 | ||||||||||
Land and land development spending (in millions) | $ | 103.8 | $ | 72.6 | $ | 31.3 | ||||||||||
Adjusted EBITDA (in millions) | $ | 44.3 | $ | 53.8 | $ | (9.5 | ) | |||||||||
Adjusted EBITDA, excluding additional insurance recoveries from third-party insurer (in millions) | $ | 44.3 | $ | 38.3 | $ | 6.0 | ||||||||||
LTM Adjusted EBITDA, excluding unexpected warranty costs (net of recoveries), additional insurance recoveries and write-off of deposit (in millions) | $ | 167.9 | $ | 161.4 | $ | 6.4 | ||||||||||
* Change and totals are calculated using unrounded numbers. |
||||||||||||||||
+ Gain on debt extinguishment, inventory impairments and abandonments and additional insurance recoveries were tax-effected at annualized effective tax rates of 36.7% and 49.5% for the three months ended June 30, 2017 and June 30, 2016, respectively. |
||||||||||||||||
“LTM” indicates amounts for the trailing 12 months. |
Nine Months Ended June 30, | ||||||||||||||||
2017 | 2016 | Change* | ||||||||||||||
New home orders, net of cancellations | 4,149 | 3,951 | 5.0 | % | ||||||||||||
LTM orders per community per month | 2.9 | 2.6 | 11.5 | % | ||||||||||||
Cancellation rates | 17.9 | % | 20.4 | % | -250 bps | |||||||||||
Total home closings | 3,621 | 3,563 | 1.6 | % | ||||||||||||
ASP from closings (in thousands) | $ | 339.8 | $ | 326.9 | 3.9 | % | ||||||||||
Homebuilding revenue (in millions) | $ | 1,230.4 | $ | 1,164.8 | 5.6 | % | ||||||||||
Homebuilding gross margin | 16.2 | % | 16.6 | % | -40 bps | |||||||||||
Homebuilding gross margin, excluding I&A | 16.2 | % | 17.8 | % | -160 bps | |||||||||||
Homebuilding gross margin, excluding I&A and interest amortized to cost of sales | 20.9 | % | 22.1 | % | -120 bps | |||||||||||
Homebuilding gross margin, excluding I&A, interest amortized to cost of sales, unexpected warranty costs (net of recoveries) and additional insurance recoveries from third-party insurer | 20.9 | % | 20.4 | % | 50 bps | |||||||||||
Income (loss) from continuing operations before income taxes (in millions) | $ | (3.0 | ) | $ | 8.1 | $ | (11.1 | ) | ||||||||
(Benefit from) provision for income taxes (in millions) | $ | (1.3 | ) | $ | 2.1 | $ | (3.3 | ) | ||||||||
Income (loss) from continuing operations (in millions)* | $ | (1.7 | ) | $ | 6.0 | $ | (7.7 | ) | ||||||||
Basic and diluted income (loss) per share from continuing operations | $ | (0.05 | ) | $ | 0.19 | $ | (0.24 | ) | ||||||||
Income (loss) from continuing operations before income taxes (in millions) | $ | (3.0 | ) | $ | 8.1 | $ | (11.1 | ) | ||||||||
Loss on debt extinguishment (in millions) | $ | 15.6 | $ | 2.0 | $ | 13.5 | ||||||||||
Inventory impairments and abandonments (in millions) | $ | 0.8 | $ | 15.1 | $ | (14.3 | ) | |||||||||
Unexpected warranty costs related to Florida stucco issues, net of recoveries (in millions) | $ | — | $ | 3.6 | $ | (3.6 | ) | |||||||||
Additional insurance recoveries from third-party insurer (in millions) | $ | — | $ | 15.5 | $ | (15.5 | ) | |||||||||
Write-off of deposit on legacy land investment | $ | 2.7 | $ | — | $ | 2.7 | ||||||||||
Income from continuing operations excluding loss on debt extinguishment, inventory impairments and abandonments, unexpected warranty costs (net of recoveries), additional insurance recoveries and write-off of deposit before income taxes (in millions)* | $ | 16.0 | $ | 6.1 | $ | 9.9 | ||||||||||
Net income (loss) | $ | (1.8 | ) | $ | 5.5 | $ | (7.4 | ) | ||||||||
Net income (loss) excluding loss on debt extinguishment, inventory impairments and abandonments, unexpected warranty costs (net of recoveries), additional insurance recoveries and write-off of deposit (in millions)*+ | $ | 10.3 | $ | 4.9 | $ | 5.4 | ||||||||||
Land and land development spending (in millions) | $ | 309.9 | $ | 267.8 | $ | 42.1 | ||||||||||
Adjusted EBITDA (in millions) | $ | 99.2 | $ | 109.4 | $ | (10.2 | ) | |||||||||
Adjusted EBITDA, excluding unexpected warranty costs (net of recoveries), additional insurance recoveries and write-off of deposit (in millions) | $ | 101.9 | $ | 90.3 | $ | 11.6 | ||||||||||
* Change and totals are calculated using unrounded numbers. |
||||||||||||||||
+ Loss on debt extinguishment,inventory impairments and abandonments, unexpected warranty costs (net of recoveries) and additional insurance recoveries were tax-effected at annualized tax effective rates of 36.7% and 49.5% for the nine months ended June 30, 2017 and June 30, 2016, respectively. |
||||||||||||||||
“LTM” indicates amounts for the trailing 12 months. |
As of June 30, 2017 |
|||||||||||||||||
As of June 30, | |||||||||||||||||
2017 | 2016 | Change | |||||||||||||||
Backlog units | 2,444 | 2,426 | 0.7 | % | |||||||||||||
Dollar value of backlog (in millions) | $ | 859.9 | $ | 814.6 | 5.6 | % | |||||||||||
ASP in backlog (in thousands) | $ | 351.8 | $ | 335.8 | 4.8 | % | |||||||||||
Land and lots controlled | 22,481 | 24,317 | (7.6 | )% | |||||||||||||
Conference Call
The Company will hold a conference call on August 1, 2017 at
Headquartered in
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) economic changes
nationally or in local markets, changes in consumer confidence, declines
in employment levels, inflation or increases in the quantity and
decreases in the price of new homes and resale homes on the market; (ii)
the cyclical nature of the homebuilding industry and a potential
deterioration in homebuilding industry conditions; (iii) 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 our production and overhead cost structure; (iv) 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;
(v) shortages of or increased prices for labor, land or raw materials
used in housing production, and the level of quality and craftsmanship
provided by our subcontractors; (vi) estimates related to homes to be
delivered in the future (backlog) are imprecise, as they are subject to
various cancellation risks that cannot be fully controlled; (vii) 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 for tax purposes or an increased
number of foreclosures; (viii) our cost of and ability to access
capital, due to factors such as limitations in the capital markets or
adverse credit market conditions, 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;
(ix) our ability to reduce our outstanding indebtedness and to comply
with covenants in our debt agreements or satisfy such obligations
through repayment or refinancing; (x) increased competition or delays in
reacting to changing consumer preferences in home design; (xi)
continuing severe weather conditions 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; (xii) estimates related
to the potential recoverability of our deferred tax assets, and a
potential reduction in corporate tax rates that could reduce the
usefulness of our existing deferred tax assets; (xiii) 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; (xiv)
the results of litigation or government proceedings and fulfillment of
any related obligations; (xv) the impact of construction defect and home
warranty claims, including water intrusion issues in
Any forward-looking statement 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 for management to predict all such factors.
-Tables Follow-
BEAZER HOMES USA, INC. |
|||||||||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||||
Total revenue | $ | 478,588 | $ | 459,937 | $ | 1,243,297 | $ | 1,189,993 | |||||||||||||
Home construction and land sales expenses | 399,675 | 370,367 | 1,043,041 | 980,094 | |||||||||||||||||
Inventory impairments and abandonments | 470 | 11,917 | 752 | 15,098 | |||||||||||||||||
Gross profit | 78,443 | 77,653 | 199,504 | 194,801 | |||||||||||||||||
Commissions | 18,773 | 17,500 | 48,728 | 45,856 | |||||||||||||||||
General and administrative expenses | 40,794 | 40,457 | 117,282 | 111,024 | |||||||||||||||||
Depreciation and amortization | 3,307 | 3,387 | 9,139 | 9,434 | |||||||||||||||||
Operating income | 15,569 | 16,309 | 24,355 | 28,487 | |||||||||||||||||
Equity in income of unconsolidated entities | 158 | 62 | 213 | 71 | |||||||||||||||||
Gain (loss) on extinguishment of debt | — | 429 | (15,563 | ) | (2,030 | ) | |||||||||||||||
Other expense, net | (2,871 | ) | (5,344 | ) | (12,007 | ) | (18,467 | ) | |||||||||||||
Income (loss) from continuing operations before income taxes | 12,856 | 11,456 | (3,002 | ) | 8,061 | ||||||||||||||||
Expense (benefit) from income taxes | 5,742 | 5,349 | (1,262 | ) | 2,067 | ||||||||||||||||
Income (loss) from continuing operations | 7,114 | 6,107 | (1,740 | ) | 5,994 | ||||||||||||||||
Income (loss) from discontinued operations, net of tax | 9 | (325 | ) | (101 | ) | (447 | ) | ||||||||||||||
Net income (loss) and comprehensive income (loss) | $ | 7,123 | $ | 5,782 | $ | (1,841 | ) | $ | 5,547 | ||||||||||||
Weighted average number of shares: | |||||||||||||||||||||
Basic | 31,971 | 31,813 | 31,944 | 31,793 | |||||||||||||||||
Diluted | 32,375 | 31,820 | 31,944 | 31,797 | |||||||||||||||||
Basic income (loss) per share: | |||||||||||||||||||||
Continuing operations | $ | 0.22 | $ | 0.19 | $ | (0.05 | ) | $ | 0.19 | ||||||||||||
Discontinued operations | — | (0.01 | ) | — | (0.01 | ) | |||||||||||||||
Total | $ | 0.22 | $ | 0.18 | $ | (0.05 | ) | $ | 0.18 | ||||||||||||
Diluted income (loss) per share: | |||||||||||||||||||||
Continuing operations | $ | 0.22 | $ | 0.19 | $ | (0.05 | ) | $ | 0.19 | ||||||||||||
Discontinued operations | — | (0.01 | ) | — | (0.01 | ) | |||||||||||||||
Total | $ | 0.22 | $ | 0.18 | $ | (0.05 | ) | $ | 0.18 | ||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||||||||
June 30, | June 30, | ||||||||||||||||||||
Capitalized Interest in Inventory | 2017 | 2016 | 2017 | 2016 | |||||||||||||||||
Capitalized interest in inventory, beginning of period | $ | 146,916 | $ | 140,139 | $ | 138,108 | $ | 123,457 | |||||||||||||
Interest incurred | 26,243 | 28,758 | 79,812 | 89,313 | |||||||||||||||||
Capitalized interest impaired | — | (626 | ) | — | (710 | ) | |||||||||||||||
Interest expense not qualified for capitalization and included as other expense | (2,934 | ) | (5,406 | ) | (12,232 | ) | (19,471 | ) | |||||||||||||
Capitalized interest amortized to home construction and land sales expenses | (21,895 | ) | (20,467 | ) | (57,358 | ) | (50,191 | ) | |||||||||||||
Capitalized interest in inventory, end of period | $ | 148,330 | $ | 142,398 | $ | 148,330 | $ | 142,398 |
BEAZER HOMES USA, INC. |
|||||||||||
June 30, 2017 | September 30, 2016 | ||||||||||
ASSETS | |||||||||||
Cash and cash equivalents | $ | 168,381 | $ | 228,871 | |||||||
Restricted cash | 12,735 | 14,405 | |||||||||
Accounts receivable (net of allowance of $176 and $354, respectively) | 39,816 | 53,226 | |||||||||
Income tax receivable | 380 | 292 | |||||||||
Owned Inventory | 1,655,853 | 1,569,279 | |||||||||
Investments in unconsolidated entities | 3,850 | 10,470 | |||||||||
Deferred tax assets, net | 312,370 | 309,955 | |||||||||
Property and equipment, net | 18,658 | 19,138 | |||||||||
Other assets | 9,582 | 7,522 | |||||||||
Total assets | $ | 2,221,625 | $ | 2,213,158 | |||||||
LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
Trade accounts payable | $ | 119,408 | $ | 104,174 | |||||||
Other liabilities | 119,654 | 134,253 | |||||||||
Total debt (net of premium of $3,606 and $1,482, respectively, and debt issuance costs of $14,908 and $15,514, respectively) | 1,334,623 | 1,331,878 | |||||||||
Total liabilities | $ | 1,573,685 | $ | 1,570,305 | |||||||
Stockholders’ equity: | |||||||||||
Preferred stock (par value $.01 per share, 5,000,000 shares authorized, no shares issued) | $ | — | $ | — | |||||||
Common stock (par value $0.001 per share, 63,000,000 shares authorized, 33,545,740 issued and outstanding and 33,071,331 issued and outstanding, respectively) | 34 | 33 | |||||||||
Paid-in capital | 872,217 | 865,290 | |||||||||
Accumulated deficit | (224,311 | ) | (222,470 | ) | |||||||
Total stockholders’ equity | 647,940 | 642,853 | |||||||||
Total liabilities and stockholders’ equity | $ | 2,221,625 | $ | 2,213,158 | |||||||
Inventory Breakdown | |||||||||||
Homes under construction | $ | 558,533 | $ | 377,191 | |||||||
Development projects in progress | 706,134 | 742,417 | |||||||||
Land held for future development | 152,959 | 213,006 | |||||||||
Land held for sale | 20,182 | 29,696 | |||||||||
Capitalized interest | 148,330 | 138,108 | |||||||||
Model homes | 69,715 | 68,861 | |||||||||
Total owned inventory | $ | 1,655,853 | $ | 1,569,279 |
BEAZER HOMES USA, INC. |
||||||||||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||
SELECTED OPERATING DATA | 2017 | 2016 | 2017 | 2016 | ||||||||||||||
Closings: | ||||||||||||||||||
West region | 624 | 620 | 1,695 | 1,666 | ||||||||||||||
East region | 346 | 373 | 849 | 907 | ||||||||||||||
Southeast region | 417 | 371 | 1,077 | 990 | ||||||||||||||
Total closings | 1,387 | 1,364 | 3,621 | 3,563 | ||||||||||||||
New orders, net of cancellations: | ||||||||||||||||||
West region | 791 | 661 | 1,941 | 1,820 | ||||||||||||||
East region | 385 | 343 | 1,027 | 982 | ||||||||||||||
Southeast region | 419 | 486 | 1,181 | 1,149 | ||||||||||||||
Total new orders, net | 1,595 | 1,490 | 4,149 | 3,951 | ||||||||||||||
As of June 30, | ||||||||||||||||||
Backlog units at end of period: | 2017 | 2016 | ||||||||||||||||
West region | 1,074 | 1,109 | ||||||||||||||||
East region | 622 | 562 | ||||||||||||||||
Southeast region | 748 | 755 | ||||||||||||||||
Total backlog units | 2,444 | 2,426 | ||||||||||||||||
Dollar value of backlog at end of period (in millions) | $ | 859.9 | $ | 814.6 | ||||||||||||||
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||
SUPPLEMENTAL FINANCIAL DATA | 2017 | 2016 | 2017 | 2016 | ||||||||||||||
Homebuilding revenue: | ||||||||||||||||||
West region | $ | 208,004 | $ | 201,848 | $ | 564,908 | $ | 535,984 | ||||||||||
East region | 129,755 | 136,204 | 324,284 | 332,411 | ||||||||||||||
Southeast region | 134,637 | 112,925 | 341,204 | 296,430 | ||||||||||||||
Total homebuilding revenue | $ | 472,396 | $ | 450,977 | $ | 1,230,396 | $ | 1,164,825 | ||||||||||
Revenues: | ||||||||||||||||||
Homebuilding | $ | 472,396 | $ | 450,977 | $ | 1,230,396 | $ | 1,164,825 | ||||||||||
Land sales and other | 6,192 | 8,960 | 12,901 | 25,168 | ||||||||||||||
Total revenues | $ | 478,588 | $ | 459,937 | $ | 1,243,297 | $ | 1,189,993 | ||||||||||
Gross profit: | ||||||||||||||||||
Homebuilding | $ | 78,662 | $ | 76,803 | $ | 199,190 | $ | 193,141 | ||||||||||
Land sales and other | (219 | ) | 850 | 314 | 1,660 | |||||||||||||
Total gross profit | $ | 78,443 | $ | 77,653 | $ | 199,504 | $ | 194,801 | ||||||||||
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.
In addition, given the unusual size and nature of the charges related to
the
Three Months Ended June 30, | Nine Months Ended June 30, | |||||||||||||||||||||||||||||||||
2017 | 2016 | 2017 | 2016 | |||||||||||||||||||||||||||||||
Homebuilding gross profit/margin | $ | 78,662 | 16.7 | % | $ | 76,803 | 17.0 | % | $ | 199,190 | 16.2 | % | $ | 193,141 | 16.6 | % | ||||||||||||||||||
Inventory impairments and abandonments (I&A) | — | 11,899 | 188 | 14,512 | ||||||||||||||||||||||||||||||
Homebuilding gross profit/margin before I&A | 78,662 | 16.7 | % | 88,702 | 19.7 | % | 199,378 | 16.2 | % | 207,653 | 17.8 | % | ||||||||||||||||||||||
Interest amortized to cost of sales | 21,895 | 20,080 | 57,358 | 49,520 | ||||||||||||||||||||||||||||||
Homebuilding gross profit/margin before I&A and interest amortized to cost of sales | 100,557 | 21.3 | % | 108,782 | 24.1 | % | 256,736 | 20.9 | % | 257,173 | 22.1 | % | ||||||||||||||||||||||
Unexpected warranty costs related to Florida stucco issues (net of expected insurance recoveries) | — | — | — | (3,612 | ) | |||||||||||||||||||||||||||||
Additional insurance recoveries from third-party insurer | — | (15,500 | ) | — | (15,500 | ) | ||||||||||||||||||||||||||||
Homebuilding gross profit/margin before I&A, interest amortized to cost of sales and unexpected warranty costs (net of recoveries) | $ | 100,557 | 21.3 | % | $ | 93,282 | 20.7 | % | $ | 256,736 | 20.9 | % | $ | 238,061 | 20.4 | % | ||||||||||||||||||
Reconciliation of Adjusted EBITDA (earnings before interest, taxes, depreciation, amortization, debt extinguishment, impairments and abandonments) 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.
In addition, given the unusual size and nature of certain amounts recorded during the periods presented, Adjusted EBITDA is also shown excluding these amounts. Management believes that this representation best reflects the operating characteristics of the Company.
Three Months Ended June 30, |
Nine Months Ended June 30, |
LTM Ended June 30,(a) | ||||||||||||||||||||||||||||
(In thousands) | 2017 | 2016 | 2017 | 2016 | 2017 | 2016 | ||||||||||||||||||||||||
Net income (loss) | $ | 7,123 | $ | 5,782 | $ | (1,841 | ) | $ | 5,547 | $ | (2,695 | ) | $ | 361,802 | ||||||||||||||||
Expense (benefit) from income taxes | 5,740 | 5,168 | (1,332 | ) | 1,809 | 13,083 | (323,387 | ) | ||||||||||||||||||||||
Interest amortized to home construction and land sales expenses, capitalized interest impaired and interest expense not qualified for capitalization | 24,829 | 26,499 | 69,590 | 70,372 | 103,928 | 101,161 | ||||||||||||||||||||||||
Depreciation and amortization and stock-based compensation amortization | 6,117 | 5,444 | 16,471 | 15,278 | 22,945 | 21,586 | ||||||||||||||||||||||||
Inventory impairments and abandonments (b) | 470 | 11,291 | 752 | 14,388 | 936 | 17,248 | ||||||||||||||||||||||||
(Gain) loss on extinguishment of debt | — | (429 | ) | 15,563 | 2,030 | 26,956 | 2,110 | |||||||||||||||||||||||
Adjusted EBITDA | $ | 44,279 | $ | 53,755 | $ | 99,203 | $ | 109,424 | $ | 165,153 | $ | 180,520 | ||||||||||||||||||
Unexpected warranty costs related to Florida stucco issues (net of expected insurance recoveries) | — | — | — | (3,612 | ) | — | (3,612 | ) | ||||||||||||||||||||||
Additional insurance recoveries from third-party insurer | — | (15,500 | ) | — | (15,500 | ) | — | (15,500 | ) | |||||||||||||||||||||
Write-off of deposit on legacy land investment | — | — | 2,700 | — | 2,700 | — | ||||||||||||||||||||||||
Adjusted EBITDA excluding unexpected warranty costs (net of recoveries), additional insurance recoveries and write-off of deposit | $ | 44,279 | $ | 38,255 | $ | 101,903 | $ | 90,312 | $ | 167,853 | $ | 161,408 | ||||||||||||||||||
(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, capitalized interest impaired and interest expense not qualified for capitalization.” |
||||||||||||||||||||||||||||||
View source version on businesswire.com: http://www.businesswire.com/news/home/20170801006413/en/
Source:
Beazer Homes USA, Inc.
David I. Goldberg, 770-829-3700
Vice
President of Treasury and Investor Relations
investor.relations@beazer.com