Beazer Homes USA, Inc., Atlanta (NYSE: BZH) on Thursday reported a loss for its fiscal second quarter ended March 31 of $7.5 million, or $0.27 per share, including a $15.6 million loss from the early extinguishment of debt incurred as part of refinancing activity. Excluding that charge, as well as abandonment and impairment costs in the quarter, net income would have been approximately $2.5 million. Analysts were expecting a loss of $0.02 per share.
For the quarter, compared to the prior-year quarter, the company reported:
- Sales per community per month of 3.4, up 9%
- New home orders, net of 1,549, up 0.7%
- Dollar value of homes in backlog of $776.4 million, up 0.4%, driven by an increase in the average selling price of homes in backlog of $347.2 thousand, up more than $11 thousand year-over-year
- Selling, general and administrative expenses (SG&A) as a percentage of total revenue was 13.3%, an improvement of 60 basis points
- Land and land development spending of $102.9 million, up 23.1%
- Total available liquidity at quarter end of $279.5 million, including $138.8 million of unrestricted cash and $140.7 million available on the Company’s revolving credit facility.
- Adjusted EBITDA for the current quarter was $33.2 million, up $7.0 million, or nearly 27% over the prior year quarter.
- Revenue was higher by 11.8% due to a 7.7% increase in home closings and 3.8% increase in average selling price.
- Homebuilding gross margin excluding interest, impairments and abandonments was 20.7%, up 50 basis points, driven by increased home prices as well as the Company’s cost control and improved cycle time initiatives.
“We had a terrific second quarter – with improvements in both home sales and closings, higher average sales prices, better gross margins and a lower SG&A ratio, all contributing to a substantial increase in EBITDA,” said Allan Merrill, Beazer’s President and CEO. “We also positioned ourselves for future growth through increased land spending, expansion of our Gatherings business and the strengthening of our balance sheet.”
Merrill continued, “Our selling proposition – to provide extraordinary value at an affordable price to Millennial and Active Adult buyers – is perfectly aligned with both our operating experience and powerful demographic trends. That’s why we remain confident in our ability to drive significant improvements in returns and profitability in the years ahead.”
Since the beginning of the second quarter, the company has accelerated operational and land investments in its Gatherings active adult communities. Ground breaking took place on the Company’s first Orlando Gatherings community in the Lake Nona master-planned development. That site will ultimately provide more than 200 homes and will be open for sales in the first quarter of fiscal year 2018. Other sites were approved for purchase representing more than 240 homes, and the Company is currently reviewing a pipeline of future potential communities that exceeds 2,000 homes.
