Beazer Homes Reports Record Fourth Quarter EPS of $3.61, up 98%; Company Issues Outlook for Diluted EPS of $10.50 for Fiscal Year 2006.ATLANTA -- Beazer Homes USA This article documents an lawsuit. Information may change rapidly as the suit progresses. . Beazer Homes USA (NYSE: BZH) is a Fortune 500 American homebuilding company based in Atlanta, Georgia. , Inc. (NYSE NYSE See: New York Stock Exchange : BZH BZH Breizh (French Brittany) BZH Big Zen Hugs ) (www.beazer.com) today announced results for the quarter ended September 30, 2005, reporting a record for quarterly earnings per share. Highlights of both the quarter and fiscal year ended September 30, 2005, compared to the same periods of the prior year, are as follows: Quarter Ended September 30, 2005 --Net income of $164.4 million, or $3.61 per diluted di·lute tr.v. di·lut·ed, di·lut·ing, di·lutes 1. To make thinner or less concentrated by adding a liquid such as water. 2. To lessen the force, strength, purity, or brilliance of, especially by admixture. share (up 105.3% and 98.4%, respectively) --Home closings: 6,339 (up 24.3%) --Total revenues: $1.8 billion (up 49.8%) --Gross margin from home construction: 23.9% (up 350 basis points) --Operating income margin: 14.1% (up 350 basis points) --New orders: 4,937 homes (up 15.5%), sales value $1.4 billion (up 25.1%) Year Ended September 30, 2005 --Reported net income of $262.5 million, or $5.87 per diluted share, including the non-cash goodwill impairment Impairment 1. A reduction in a company's stated capital. 2. The total capital that is less than the par value of the company's capital stock. Notes: 1. This is usually reduced because of poorly estimated losses or gains. 2. charge of $130.2 million incurred in Q2 2005. --Adjusted net income of $392.8 million, or $8.72 per diluted share, excluding the Q2 2005 non-cash goodwill impairment charge (up 66.6% and 56.0%, respectively). --Home closings: 18,146 (up 10.3%) --Total revenues: $5.0 billion (up 27.9%) --Gross margin from home construction: 22.6% (up 290 basis points) --Operating income margin: 9.7% --Adjusted operating income Operating Income The profit realized from a business' own operations. Notes: This would not include income from things such as investments in other firms. Also referred to as operating profit or recurring profit. margin, excluding the Q2 2005 non-cash goodwill impairment charge: 12.4% (up 270 basis points) --New orders: 18,923 (up 8.2%) --Backlog at 9/30/05: 9,233 homes (up 9.2%), sales value $2.72 billion (up 21.7%) Record September Quarter "We are pleased to report that Beazer Homes finished the year with extremely strong results, once again surpassing numerous milestones," said President and Chief Executive Officer, Ian J. McCarthy. "We generated annual revenues of $5 billion on home closings of 18,146, up 28% and 10% from fiscal 2004, respectively, and both representing all-time company records. For the September quarter, net earnings more than doubled to $164.4 million and revenues increased nearly 50% to $1.8 billion. We believe these results, coupled with strong new order growth of 16%, reflect successful execution of our profitable growth initiatives. Furthermore, Beazer Homes believes its ongoing commitment to achieving increasingly profitable growth by leveraging its size, scale and geographic reach through its national brand will position the company well to take full advantage of the favorable fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. long-term Long-term Three or more years. In the context of accounting, more than 1 year. long-term 1. Of or relating to a gain or loss in the value of a security that has been held over a specific length of time. Compare short-term. environment for the industry." "Beazer Homes' backlog Backlog The total value of sales orders waiting to be fulfilled. Notes: This figure is used mainly in the manufacturing industry. Increases or decreases in a company's backlog indicate the future direction of sales and earnings. now stands at a fourth quarter record level of 9,233 homes with a sales value of $2.72 billion, up 9% and 22%, respectively, from the backlog homes and sales value a year ago. We believe this sizeable year-end backlog provides the basis for continued strong financial performance in fiscal 2006" added McCarthy. Closings of 6,339 homes represents a quarterly record and resulted from year-over-year increases in all regions except the Midwest, where increased closings in Ohio and Kentucky Kentucky, state, United States Kentucky (kəntŭk`ē, kĭn–), one of the so-called border states of the S central United States. It is bordered by West Virginia and Virginia (E); Tennessee (S); the Mississippi R. were offset by a decline in Indiana. The growth in new home orders for the quarter resulted from increases in all regions except the West. In the West, community opening delays in Nevada and California resulted in fewer available sales opportunities during the period than previously expected. Strong Financial Performance in September Quarter "We achieved record earnings and greatly improved margins this quarter as our on-going focus on profitable growth and heightened attention to backlog conversion yielded significant returns," said James O'Leary James O'Leary may refer to;
During the fourth quarter of fiscal 2005, the company realized increases over the prior year in its home construction gross margin, total gross margin and operating income margin of 350 basis points, 340 basis points, and 350 basis points, respectively, as the company continued to realize benefits from the execution of its profitable growth strategy. Margins were also favorably fa·vor·a·ble adj. 1. Advantageous; helpful: favorable winds. 2. Encouraging; propitious: a favorable diagnosis. 3. impacted by continued strong pricing in most major markets. In the prior year fourth fiscal quarter, the company incurred warranty costs associated with Trinity Homes, LLC (Logical Link Control) See "LANs" under data link protocol. LLC - Logical Link Control and increased marketing costs associated with the company's branding initiative, totaling in the aggregate $18.5 million, and having an impact of approximately 150 basis points on operating margin Operating Margin A ratio used to measure a company's pricing strategy and operating efficiency. Calculated by: . Also, during the fourth quarter of fiscal 2005, the company benefited from a favorable tax adjustment which reduced tax expense by approximately $4.0 million or $0.09 per diluted share. Fiscal 2006 EPS (Encapsulated PostScript) A PostScript file format used to transfer a graphic image between applications and platforms. EPS files contain PostScript code as well as an optional preview image in TIFF, WMF, PICT or EPSI, the latter being an ASCII-only format. Outlook "Our strong level of backlog, coupled with our current expectations for further competitive advantages for large public builders such as Beazer Homes provide us confidence in our future growth opportunities," said McCarthy. "In addition, we expect continued execution of our profitable growth strategy to capitalize on Cap´i`tal`ize on` v. t. 1. To turn (an opportunity) to one's advantage; to take advantage of (a situation); to profit from; as, to capitalize on an opponent's mistakes s>. our broad geographic profile through focused product expansion, leveraging our national brand and achieving optimal efficiencies, will result in continued growth and meaningfully enhanced shareholder value. As such, our initial outlook for fiscal 2006 diluted earnings per share diluted earnings per share An earnings measure calculated by dividing net income less preferred stock dividends for a period by the average number of shares of common stock that would be outstanding if all convertible securities were converted into shares of is $10.50 per share, representing growth of 20% over adjusted earnings per share of $8.72 in fiscal 2005. In addition, we are presently evaluating our capital allocation The apportionment or designation of an item for a specific purpose or to a particular place. In the law of trusts, the allocation of cash dividends earned by a stock that makes up the principal of a trust for a beneficiary usually means that the dividends will be treated as strategies, including our existing share repurchase Share Repurchase A program by which a company buys back its own shares from the marketplace, reducing the number of outstanding shares. This is usually an indication that the company's management thinks the shares are undervalued. authorization The right or permission to use a system resource; the process of granting access. See access control. of approximately 2.0 million shares, within the current environment in order to optimize optimize - optimisation the utilization of our capital resources. Any impact this evaluation would have on our outlook will be addressed prospectively." Conference Call The company will hold a conference call today, November 2, 2005, at 1:00 PM ET to discuss the results and take questions. You may listen to the conference call and view the company's slide presentation over the internet by going to the "Investor Relations Investor relations The process by which the corporation communicates with its investors. " section of the company's website at www.beazer.com. To access the conference call by telephone, listeners should dial 800-369-1904. 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 800-846-6092 (available until 5:00 PM ET on November 9, 2005), or visit www.beazer.com. Beazer Homes USA, Inc., headquartered in Atlanta, is one of the country's ten largest single-family homebuilders with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, Nevada, New Jersey, New Mexico New Mexico, state in the SW United States. At its northwestern corner are the so-called Four Corners, where Colorado, New Mexico, Arizona, and Utah meet at right angles; New Mexico is also bordered by Oklahoma (NE), Texas (E, S), and Mexico (S). , New York New York, state, United States New York, Middle Atlantic state of the United States. It is bordered by Vermont, Massachusetts, Connecticut, and the Atlantic Ocean (E), New Jersey and Pennsylvania (S), Lakes Erie and Ontario and the Canadian province of , North Carolina North Carolina, state in the SE United States. It is bordered by the Atlantic Ocean (E), South Carolina and Georgia (S), Tennessee (W), and Virginia (N). Facts and Figures Area, 52,586 sq mi (136,198 sq km). Pop. , Ohio, Pennsylvania, South Carolina South Carolina, state of the SE United States. It is bordered by North Carolina (N), the Atlantic Ocean (SE), and Georgia (SW). Facts and Figures Area, 31,055 sq mi (80,432 sq km). Pop. (2000) 4,012,012, a 15. , Tennessee, Texas, Virginia and West Virginia West Virginia, E central state of the United States. It is bordered by Pennsylvania and Maryland (N), Virginia (E and S), and Kentucky and, across the Ohio R., Ohio (W). Facts and Figures Area, 24,181 sq mi (62,629 sq km). Pop. and also provides mortgage origination Origination The process through which a mortgage lender creates a mortgage secured by some amount of the mortgagor's real property. Notes: Also known as loan origination, everyone must go through the origination process when securing a mortgage for a piece of real and title services to its homebuyers. Beazer Homes, a Fortune 500 company, is listed on the New York Stock Exchange New York Stock Exchange (NYSE) World's largest marketplace for securities. The exchange began as an informal meeting of 24 men in 1792 on what is now Wall Street in New York City. under the ticker symbol Ticker Symbol An arrangement of characters (usually letters) representing a particular security listed on an exchange or otherwise traded publicly. When a company issues securities to the public marketplace, it selects an available ticker symbol for its securities which investors "BZH." Use of Non-GAAP Financial Information In addition to the results in this press release reported in accordance Accordance is Bible Study Software for Macintosh developed by OakTree Software, Inc.[] As well as a standalone program, it is the base software packaged by Zondervan in their Bible Study suites for Macintosh. with generally accepted accounting principles The standard accounting rules, regulations, and procedures used by companies in maintaining their financial records. Generally accepted accounting principles (GAAP) provide companies and accountants with a consistent set of guidelines that cover both broad accounting in the United States United States, officially United States of America, republic (2005 est. pop. 295,734,000), 3,539,227 sq mi (9,166,598 sq km), North America. The United States is the world's third largest country in population and the fourth largest country in area. ("GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). "), the Company has provided information regarding adjusted operating income margin, net income and earnings per share which excludes the effects of the non-cash goodwill impairment charge recorded during the second quarter of fiscal 2005. Management believes that these adjusted financial results are useful to both management and investors in the analysis of the Company's financial performance when comparing it to prior periods and that they provide investors with an important perspective on the current underlying operating performance of the business by isolating i·so·late tr.v. i·so·lat·ed, i·so·lat·ing, i·so·lates 1. To set apart or cut off from others. 2. To place in quarantine. 3. the impact of a non-cash adjustment related to a previous acquisition. Below is a reconciliation of these non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP:
Twelve Months
Ended
September 30,
2005
---------------
(in thousands, except per share data)
Reported operating income $ 486,918
Total revenues $ 4,995,353
Reported operating income margin 9.7%
Adjusted operating income margin
Reported operating income $ 486,918
Goodwill impairment loss 130,235
---------------
Operating income, excluding goodwill impairment loss $ 617,153
===============
Operating income margin, excluding goodwill impairment
loss 12.4%
Reported net income $ 262,524
Reported net income per common share $ 5.87
Adjusted Net Income and Earnings Per Share:
Reported net income $ 262,524
Goodwill impairment loss 130,235
---------------
Net income, excluding goodwill impairment loss $ 392,759
===============
After-tax interest add-back to pro-forma net income
for 'if converted' treatment of convertible notes in
calculation of diluted net income per common share $ 5,325
Diluted net income per common share, excluding
goodwill impairment loss $ 8.72
Diluted weighted average shares outstanding 45,634
Forward-Looking Statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. Certain statements in this press release are "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act The Private Securities Litigation Reform Act of 1995 (PSLRA) implemented several significant substantive changes affecting certain cases brought under the federal securities laws, including changes related to pleading, discovery, liability, class representation and awards fees and of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such risks, uncertainties and other factors include, but are not limited to, changes in general economic conditions, fluctuations in interest rates, increases in raw materials and labor costs, levels of competition, potential liability as a result of construction defect defect - bug , product liability and warranty claims, the possibility that the company's improvement plan for the Midwest and strategies to broaden target price points and lessen less·en v. less·ened, less·en·ing, less·ens v.tr. 1. To make less; reduce. 2. Archaic To make little of; belittle. v.intr. To become less; decrease. dependence on the entry-level segment in certain markets will not achieve desired results, and other factors described in the Company's Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. for the year ended September 30, 2004, Quarterly Report on Form 10-Q Form 10-Q See 10-Q. for the quarter ended June 30, 2005 and Form S-4 filed with the Securities and Exchange Commission on August 3, 2005.
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA
(Dollars in thousands, except per share amounts)
FINANCIAL DATA
----------------------
Quarter Ended Year Ended
September 30, September 30,
----------------------- -----------------------
2005 2004 2005 2004
----------- ----------- ----------- -----------
INCOME STATEMENT
Revenues $1,814,051 $1,211,141 $4,995,353 $3,907,109
Costs and expenses:
Home construction
and land sales 1,367,189 953,898 3,823,300 3,099,732
Selling, general and
administrative
expense 191,345 129,042 554,900 429,442
Goodwill impairment
charge - - 130,235 -
----------- ----------- ----------- -----------
Operating income 255,517 128,201 486,918 377,935
Equity in income
(loss) of
unconsolidated joint
ventures 1,871 (187) 5,021 1,561
Other income 2,408 3,276 7,395 7,079
----------- ----------- ----------- -----------
Income before income
taxes 259,796 131,290 499,334 386,575
Income taxes 95,372 51,203 236,810 150,764
----------- ----------- ----------- -----------
Net income $ 164,424 $ 80,087 $ 262,524 $ 235,811
=========== =========== =========== ===========
Net income per common
share:
Basic $ 4.04 $ 2.02 $ 6.49 $ 5.91
=========== =========== =========== ===========
Diluted $ 3.61 $ 1.82 $ 5.87 $ 5.59
=========== =========== =========== ===========
Weighted average
shares outstanding,
in thousands:
Basic 40,669 39,723 40,468 39,879
Diluted 45,935 44,746 45,634 42,485
Interest incurred $ 25,409 $ 21,163 $ 89,678 $ 76,035
Interest amortized to
cost of sales $ 27,508 $ 20,016 $ 82,388 $ 66,199
EPS interest add back
- Convertible Debt $ 1,332 $ 1,315 $ 5,325 $ 1,616
Depreciation and
amortization $ 5,863 $ 3,655 $ 21,174 $ 15,755
SELECTED BALANCE SHEET September 30,
DATA 2005 2004
----------- -----------
Cash $ 297,098 $ 320,880
Inventory 2,901,165 2,344,095
Total assets 3,770,516 3,163,030
Total debt 1,321,936 1,150,972
Shareholders' equity 1,504,688 1,232,121
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA (Continued)
(Dollars in thousands)
OPERATING DATA
----------------------
Quarter Ended Year Ended
September 30, September 30,
----------------------- ----------- -----------
SELECTED OPERATING
DATA 2005 2004 2005 2004
----------- ----------- ----------- -----------
Closings:
Southeast region 2,440 1,782 6,366 5,576
West region 1,906 1,700 6,230 5,880
Central region 561 356 1,427 1,020
Mid-Atlantic region 695 489 1,870 1,583
Midwest region 737 771 2,253 2,392
----------- ----------- ----------- -----------
Total closings 6,339 5,098 18,146 16,451
=========== =========== =========== ===========
New orders, net of
cancellations:
Southeast region 2,044 1,548 6,811 5,884
West region 1,344 1,571 6,207 6,733
Central region 454 220 1,513 1,053
Mid-Atlantic region 434 367 2,016 1,513
Midwest region 661 570 2,376 2,298
----------- ----------- ----------- -----------
Total new orders 4,937 4,276 18,923 17,481
=========== =========== =========== ===========
Backlog units at end
of period:
Southeast region 3,074 2,629
West region 3,117 3,140
Central region 515 429
Mid-Atlantic region 1,193 1,047
Midwest region 1,334 1,211
----------- -----------
Total backlog units 9,233 8,456
=========== ===========
Dollar value of
backlog at end of
period $2,721,744 $2,235,917
=========== ===========
Active subdivisions:
Southeast region 160 177
West region 106 90
Central region 51 43
Mid-Atlantic region 65 57
Midwest region 136 129
----------- -----------
Total active
subdivisions 518 496
=========== ===========
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA (Continued)
(Dollars in thousands)
Quarter Ended Year Ended
September 30, September 30,
----------------------- -----------------------
SUPPLEMENTAL FINANCIAL
DATA: 2005 2004 2005 2004
----------- ----------- ----------- -----------
Revenues
Home sales $1,796,491 $1,187,246 $4,922,793 $3,824,142
Land and lot sales 4,760 12,566 34,527 44,702
Mortgage origination
revenue 18,438 15,169 54,310 51,140
Intercompany
elimination
- mortgage (5,638) (3,840) (16,277) (12,875)
----------- ----------- ----------- -----------
Total revenues $1,814,051 $1,211,141 $4,995,353 $3,907,109
=========== =========== =========== ===========
Cost of home
construction and land
sales
Home sales $1,367,356 $ 944,774 $3,810,123 $3,069,976
Land and lot sales 5,471 12,964 29,454 42,631
Intercompany
elimination
- mortgage (5,638) (3,840) (16,277) (12,875)
----------- ----------- ----------- -----------
Total costs of home
construction and land
sales $1,367,189 $ 953,898 $3,823,300 $3,099,732
=========== =========== =========== ===========
Selling, general and
administrative
Homebuilding
operations $ 178,653 $ 120,091 $ 516,217 $ 397,601
Mortgage origination
operations 12,692 8,951 38,683 31,841
----------- ----------- ----------- -----------
Total selling, general
and administrative $191,345 $129,042 $554,900 $429,442
=========== =========== =========== ===========
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