Business Wire | Apr 29, 2021 04:15PM EDT

Beazer Homes Reports Strong Second Quarter Fiscal 2021 Results

Apr. 29, 2021

ATLANTA--(BUSINESS WIRE)--Apr. 29, 2021--Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three and six months ended March 31, 2021.

"We had an extraordinary second quarter, driven by strong operational execution and continued strength in the housing market," said Allan P. Merrill, the company's Chairman and Chief Executive Officer. "We generated significant growth in sales pace, average sales price, gross margin and adjusted EBITDA, leading to a doubling in our quarterly net income versus last year. At the same time, we improved our balance sheet efficiency by increasing our share of lots controlled by options while continuing to reduce leverage."

Commenting on fiscal 2021 full-year expectations, Mr. Merrill said, "With evidence of continued strength in new home demand and the enhanced visibility provided by a backlog that is up more than 50% in dollar value compared to last year, we now expect fiscal 2021 earnings per share to be above $3.00."

Looking beyond fiscal 2021, Mr. Merrill concluded, "Our balanced growth strategy and commitment to expanding our already robust ESG program, has positioned us to generate further improvements in profitability and returns for shareholders in the years ahead, while creating durable and growing value for our customers, employees and partners as well."

Beazer Homes Fiscal Second Quarter 2021 Highlights and Comparison to Fiscal Second Quarter 2020

* Net income from continuing operations of $24.6 million, compared to net income from continuing operations of $10.6 million in fiscal second quarter 2020 * Adjusted EBITDA of $64.2 million, up 46.2% * Homebuilding revenue of $547.4 million, up 12.2% on a 3.2% increase in average selling price to $394.4 thousand and an 8.7% increase in home closings to 1,388 * Homebuilding gross margin was 17.8%, up 170 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 22.2%, up 140 basis points * SG&A as a percentage of total revenue was 11.0%, down 100 basis points year-over-year * Net new orders of 1,854, up 11.6% on a 42.3% increase in orders/community/month to 4.7 and a 21.6% decrease in average community count to 131 * Dollar value of backlog of $1,386.4 million, up 54.9% * Unrestricted cash at quarter end was $355.5 million; total liquidity was $605.5 million

The following provides additional details on the Company's performance during the fiscal second quarter 2021:

Profitability. Net income from continuing operations was $24.6 million, generating diluted earnings per share of $0.81. Second quarter adjusted EBITDA of $64.2 million was up $20.3 million year-over-year. The increase in profitability was primarily driven by higher revenue, homebuilding gross margin and improved SG&A leverage.

Orders. Net new orders for the second quarter increased to 1,854, up 11.6% from the prior year, achieving the highest second quarter and the highest first half of the year level in more than a decade. The increase in net new orders was driven by a 42.3% increase in the absorption rate to 4.7 sales per community per month, up from 3.3 in the previous year, partially offset by a 21.6% decrease in average community count to 131. The cancellation rate for the quarter was 10.0%, an improvement of 580 basis points year-over-year.

Backlog. The dollar value of homes in backlog as of March 31, 2021 increased 54.9% to $1,386.4 million, representing 3,303 homes, compared to $895.0 million, representing 2,231 homes, at the same time last year. The average selling price of homes in backlog was $419.7 thousand, up 4.6% year-over-year.

Homebuilding Revenue. Second quarter homebuilding revenue was $547.4 million, up 12.2% year-over-year. The increase in homebuilding revenue was driven by an 8.7% increase in home closings to 1,388 homes and a 3.2% increase in the average selling price to $394.4 thousand.

Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 22.2% for the second quarter, up 140 basis points year-over-year, driven primarily by lower sales incentives and pricing increases. Gross margin was up across each of our geographic segments.

SG&A Expenses. Selling, general and administrative expenses as a percentage of total revenue was 11.0% for the quarter, down 100 basis points year-over-year as a result of the Company's continued focus on overhead cost management while driving revenue growth.

Liquidity. At the close of the second quarter, the Company had approximately $605.5 million of available liquidity, including $355.5 million of unrestricted cash and a fully undrawn revolving credit facility capacity of $250.0 million.

Debt Repurchases. The Company repurchased $9.7 million of its outstanding 5.875% unsecured Senior Notes due October 2027 at an average price of $104.792 per $100 principal amount.

Commitment to Net Zero Energy Ready

In April 2021, we received the 2021 ENERGY STAR(r) Partner of the Year-Sustained Excellence Award from the U.S. Environmental Protection Agency and the U.S. Department of Energy for the sixth consecutive year. The Sustained Excellence Award represents the highest honor bestowed under the ENERGY STAR(r) program and underscores our commitment to improve energy efficiency. As described in our most recent proxy statement, in December 2020 we became the first national builder to publicly commit to ensuring every home we build is Net Zero Energy Ready by the end of 2025. We calculate the energy performance of our homes using the industry standard Home Energy Rating System (HERS), which measures energy efficiency on an easy to understand scale: the lower the number, the more energy efficient the home. Net Zero Energy Ready means that every home we build will have a gross HERS index score (before any benefit of renewable energy production) of 45 or less, and homeowners will be able to achieve net zero energy by attaching a properly sized renewable energy system. Reaching our Net Zero Energy Ready target represents a significant improvement in energy efficiency and will lead to a reduction in greenhouse gas emissions.

Summary results for the three and six months ended March 31, 2021 are as follows:

Three Months Ended March 31,

2021 2020 Change*

New home orders, net of cancellations 1,854 1,661 11.6 %

Orders per community per month 4.7 3.3 42.3 %

Average active community count 131 167 (21.6 ) %

Actual community count at quarter-end 132 166 (20.5 ) %

Cancellation rates 10.0 % 15.8 % -580 bps



Total home closings 1,388 1,277 8.7 %

Average selling price (ASP) from closings (in $ 394.4 $ 382.1 3.2 %thousands)

Homebuilding revenue (in millions) $ 547.4 $ 488.0 12.2 %

Homebuilding gross margin 17.8 % 16.1 % 170 bps

Homebuilding gross margin, excluding 17.8 % 16.1 % 170 bpsimpairments and abandonments (I&A)

Homebuilding gross margin, excluding I&A and 22.2 % 20.8 % 140 bpsinterest amortized to cost of sales



Income from continuing operations before $ 32.3 $ 14.8 $ 17.6 income taxes (in millions)

Expense from income taxes (in millions) $ 7.7 $ 4.2 $ 3.5

Income from continuing operations (in $ 24.6 $ 10.6 $ 14.0 millions)

Basic income per share from continuing $ 0.82 $ 0.36 $ 0.46 operations

Diluted income per share from continuing $ 0.81 $ 0.35 $ 0.46 operations



Income from continuing operations before $ 32.3 $ 14.8 $ 17.6 income taxes (in millions)

Loss on debt extinguishment (in millions) $ (0.6 ) $ - $ (0.6 )

Income from continuing operations excludingloss on debt extinguishment before income $ 32.9 $ 14.8 $ 18.1 taxes (in millions)^(a)

Income from continuing operations excludingloss on debt extinguishment after income $ 25.0 $ 10.6 $ 14.4 taxes (in millions)^(b)



Net income $ 24.5 $ 10.6 $ 13.9



Land and land development spending (in $ 97.3 $ 123.0 $ (25.7 )millions)



Adjusted EBITDA (in millions) $ 64.2 $ 43.9 $ 20.3

LTM Adjusted EBITDA (in millions) $ 238.9 $ 194.0 $ 44.9

*

Change and totals are calculated using unrounded numbers.

(a)

Management believes that this measure assists investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating the differences in companies' respective level of loss on debt extinguishment. This measure should not be considered an alternative to income from continuing operations before income taxes determined in accordance with GAAP as an indicator of operating performance.

(b)

For the three months ended March 31, 2021, the loss on debt extinguishment was tax-effected at the effective tax rate of 24.2%. For the three months ended March 31, 2020, there was no loss on debt extinguishment.

"LTM" indicates amounts for the trailing 12 months.

* Change and totals are calculated using unrounded numbers.



Management believes that this measure assists investors in understanding and comparing the operating characteristics of homebuilding activities by^ eliminating the differences in companies' respective level of loss on(a) debt extinguishment. This measure should not be considered an alternative to income from continuing operations before income taxes determined in accordance with GAAP as an indicator of operating performance.



For the three months ended March 31, 2021, the loss on debt^ extinguishment was tax-effected at the effective tax rate of 24.2%. For(b) the three months ended March 31, 2020, there was no loss on debt extinguishment.

"LTM" indicates amounts for the trailing 12 months.

Six Months Ended March 31,

2021

2020

Change*

New home orders, net of cancellations

3,296

2,912

13.2

%

LTM orders per community per month

3.8

2.9

31.0

%

Cancellation rates

11.0

%

15.4

%

-440 bps

Total home closings

2,502

2,389

4.7

%

ASP from closings (in thousands)

$

388.3

$

379.0

2.5

%

Homebuilding revenue (in millions)

$

971.6

$

905.4

7.3

%

Homebuilding gross margin

17.7

%

15.7

%

200 bps

Homebuilding gross margin, excluding I&A

17.8

%

15.7

%

210 bps

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

22.2

%

20.3

%

190 bps

Income from continuing operations before income taxes (in millions)

$

48.5

$

17.4

$

31.1

Expense from income taxes (in millions)

$

11.8

$

4.0

$

7.9

Income from continuing operations (in millions)

$

36.7

$

13.4

$

23.3

Basic income per share from continuing operations

$

1.23

$

0.45

$

0.78

Diluted income per share from continuing operations

$

1.22

$

0.45

$

0.77

Income from continuing operations before income taxes (in millions)

$

48.5

$

17.4

$

31.1

Loss on debt extinguishment (in millions)

$

(0.6

)

$

-

$

(0.6

)

Inventory impairments and abandonments (in millions)

$

(0.5

)

$

-

$

(0.5

)

Income from continuing operations excluding loss on debt extinguishment, and inventory impairments and abandonments before income taxes (in millions)(a)

$

49.6

$

17.4

$

32.2

Income from continuing operations excluding loss on debt extinguishment, and inventory impairments and abandonments after income taxes (in millions)(b)

$

37.4

$

13.4

$

24.0

Net income

$

36.5

$

13.4

$

23.2

Land and land development spending (in millions)

$

206.9

$

269.0

$

(62.1

)

Adjusted EBITDA (in millions)

$

107.8

$

73.3

$

34.5

Six Months Ended March 31,

2021 2020 Change*

New home orders, net of cancellations 3,296 2,912 13.2 %

LTM orders per community per month 3.8 2.9 31.0 %

Cancellation rates 11.0 % 15.4 % -440 bps



Total home closings 2,502 2,389 4.7 %

ASP from closings (in thousands) $ 388.3 $ 379.0 2.5 %

Homebuilding revenue (in millions) $ 971.6 $ 905.4 7.3 %

Homebuilding gross margin 17.7 % 15.7 % 200 bps

Homebuilding gross margin, excluding I&A 17.8 % 15.7 % 210 bps

Homebuilding gross margin, excluding I&A and 22.2 % 20.3 % 190 bpsinterest amortized to cost of sales



Income from continuing operations before $ 48.5 $ 17.4 $ 31.1 income taxes (in millions)

Expense from income taxes (in millions) $ 11.8 $ 4.0 $ 7.9

Income from continuing operations (in $ 36.7 $ 13.4 $ 23.3 millions)

Basic income per share from continuing $ 1.23 $ 0.45 $ 0.78 operations

Diluted income per share from continuing $ 1.22 $ 0.45 $ 0.77 operations



Income from continuing operations before $ 48.5 $ 17.4 $ 31.1 income taxes (in millions)

Loss on debt extinguishment (in millions) $ (0.6 ) $ - $ (0.6 )

Inventory impairments and abandonments (in $ (0.5 ) $ - $ (0.5 )millions)

Income from continuing operations excludingloss on debt extinguishment, and inventory $ 49.6 $ 17.4 $ 32.2 impairments and abandonments before incometaxes (in millions)^(a)

Income from continuing operations excludingloss on debt extinguishment, and inventory $ 37.4 $ 13.4 $ 24.0 impairments and abandonments after incometaxes (in millions)^(b)



Net income $ 36.5 $ 13.4 $ 23.2



Land and land development spending (in $ 206.9 $ 269.0 $ (62.1 )millions)



Adjusted EBITDA (in millions) $ 107.8 $ 73.3 $ 34.5

*

Change and totals are calculated using unrounded numbers.

(a)

Management believes that this measure assists investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating the differences in companies' respective level of loss on debt extinguishment and level of impairments. This measure should not be considered an alternative to income from continuing operations before income taxes determined in accordance with GAAP as an indicator of operating performance.

(b)

For the six months ended March 31, 2021, loss on debt extinguishment, and inventory impairments and abandonments were tax-effected at the effective tax rate of 24.2%. For the six months ended March 31, 2020, there were no loss on debt extinguishment, and inventory impairments and abandonments.

"LTM" indicates amounts for the trailing 12 months.

* Change and totals are calculated using unrounded numbers.



Management believes that this measure assists investors in understanding and comparing the operating characteristics of homebuilding activities by^ eliminating the differences in companies' respective level of loss on(a) debt extinguishment and level of impairments. This measure should not be considered an alternative to income from continuing operations before income taxes determined in accordance with GAAP as an indicator of operating performance.



For the six months ended March 31, 2021, loss on debt extinguishment, and^ inventory impairments and abandonments were tax-effected at the effective(b) tax rate of 24.2%. For the six months ended March 31, 2020, there were no loss on debt extinguishment, and inventory impairments and abandonments.

"LTM" indicates amounts for the trailing 12 months.

As of March 31,

2021

2020

Change

Backlog units

3,303

2,231

48.1

%

Dollar value of backlog (in millions)

$

1,386.4

$

895.0

54.9

%

ASP in backlog (in thousands)

$

419.7

$

401.2

4.6

%

Land and lots controlled

18,230

19,654

(7.2

)%

Conference Call

The Company will hold a conference call on April 29, 2021 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 517-308-9429). To be admitted to the call, enter the pass code "8571348". A replay of the conference call will be available, until 10:00 PM ET on May 6, 2021 at 800-839-8789 (for international callers, dial 203-369-3037) 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(tm), 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, which will save 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: (i) the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; (ii) economic changes nationally or in local markets, changes in consumer confidence, wage levels, declines in employment levels, inflation and governmental actions that are out of our control and affect the affordability of and demand for, the homes we sell; (iii) the potential negative impact of the COVID-19 pandemic, which, in addition to exacerbating each of the risks listed above and below, may include a significant decrease in demand for our homes or consumer confidence generally with respect to purchasing a home, an inability to sell and build homes in a typical manner or at all, increased costs or decreased supply of building materials, including lumber, or the availability of subcontractors, housing inspectors, and other third-parties we rely on to support our operations, and recognizing charges in future periods, which may be material, for goodwill impairments, inventory impairments and/or land option contract abandonments; (iv) 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; (v) the availability and cost of land and the risks associated with the future value of our inventory, such as asset impairment charges we took on select California assets during the second quarter of fiscal 2019; (vi) factors affecting margins, such as 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 production and overhead cost structure; (vii) our ability to raise debt and/or equity capital, due to factors such as limitations in the capital markets (including market volatility) or adverse credit market conditions, 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; (viii) market perceptions regarding any capital raising initiatives we may undertake (including future issuances of equity or debt capital); (ix) terrorist acts, protests and civil unrest, political uncertainty, natural disasters, acts of war or other factors over which the Company has little or no control; (x) 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; (xi) increases in mortgage interest rates, increased disruption in the availability of mortgage financing, changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes or an increased number of foreclosures; (xii) increased competition or delays in reacting to changing consumer preferences in home design; (xiii) 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; (xiv) the potential recoverability of our deferred tax assets; (xv) increases in corporate tax rates; (xvi) 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; (xvii) the results of litigation or government proceedings and fulfillment of any related obligations; (xviii) the impact of construction defect and home warranty claims; (xix) the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred; (xx) the impact of information technology failures, cybersecurity issues or data security breaches; or (xxi) the impact on homebuilding in key markets of governmental regulations limiting the availability of water.

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-

As of March 31,

2021 2020 Change

Backlog units 3,303 2,231 48.1 %

Dollar value of backlog (in millions) $ 1,386.4 $ 895.0 54.9 %

ASP in backlog (in thousands) $ 419.7 $ 401.2 4.6 %

Land and lots controlled 18,230 19,654 (7.2 )%

Conference Call

The Company will hold a conference call on April 29, 2021 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 517-308-9429). To be admitted to the call, enter the pass code "8571348". A replay of the conference call will be available, until 10:00 PM ET on May 6, 2021 at 800-839-8789 (for international callers, dial 203-369-3037) 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(tm), 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, which will save 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: (i) the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; (ii) economic changes nationally or in local markets, changes in consumer confidence, wage levels, declines in employment levels, inflation and governmental actions that are out of our control and affect the affordability of and demand for, the homes we sell; (iii) the potential negative impact of the COVID-19 pandemic, which, in addition to exacerbating each of the risks listed above and below, may include a significant decrease in demand for our homes or consumer confidence generally with respect to purchasing a home, an inability to sell and build homes in a typical manner or at all, increased costs or decreased supply of building materials, including lumber, or the availability of subcontractors, housing inspectors, and other third-parties we rely on to support our operations, and recognizing charges in future periods, which may be material, for goodwill impairments, inventory impairments and/or land option contract abandonments; (iv) 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; (v) the availability and cost of land and the risks associated with the future value of our inventory, such as asset impairment charges we took on select California assets during the second quarter of fiscal 2019; (vi) factors affecting margins, such as 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 production and overhead cost structure; (vii) our ability to raise debt and/or equity capital, due to factors such as limitations in the capital markets (including market volatility) or adverse credit market conditions, 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; (viii) market perceptions regarding any capital raising initiatives we may undertake (including future issuances of equity or debt capital); (ix) terrorist acts, protests and civil unrest, political uncertainty, natural disasters, acts of war or other factors over which the Company has little or no control; (x) 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; (xi) increases in mortgage interest rates, increased disruption in the availability of mortgage financing, changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes or an increased number of foreclosures; (xii) increased competition or delays in reacting to changing consumer preferences in home design; (xiii) 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; (xiv) the potential recoverability of our deferred tax assets; (xv) increases in corporate tax rates; (xvi) 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; (xvii) the results of litigation or government proceedings and fulfillment of any related obligations; (xviii) the impact of construction defect and home warranty claims; (xix) the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred; (xx) the impact of information technology failures, cybersecurity issues or data security breaches; or (xxi) the impact on homebuilding in key markets of governmental regulations limiting the availability of water.

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 2021 2020 2021 2020share data)

Total revenue $ 549,889 $ 489,413 $ 978,428 $ 907,217

Home construction and 451,963 410,568 804,744 765,235 land sales expenses

Inventory impairments and - - 465 - abandonments

Gross profit 97,926 78,845 173,219 141,982

Commissions 20,884 18,744 37,391 34,809

General and 39,741 40,050 77,717 79,749 administrative expenses

Depreciation and 3,683 3,627 6,805 7,054 amortization

Operating income 33,618 16,424 51,306 20,370

Equity in income of 186 147 111 134 unconsolidated entities

Loss on extinguishment of (563 ) - (563 ) - debt

Other expense, net (894 ) (1,786 ) (2,346 ) (3,126 )

Income from continuingoperations before income 32,347 14,785 48,508 17,378 taxes

Expense from income taxes 7,704 4,170 11,829 3,959

Income from continuing 24,643 10,615 36,679 13,419 operations

Loss from discontinued (115 ) (1 ) (154 ) (59 )operations, net of tax

Net income $ 24,528 $ 10,614 $ 36,525 $ 13,360

Weighted average number of shares:

Basic 29,953 29,868 29,862 29,808

Diluted 30,215 29,975 30,150 30,078



Basic income (loss) per share:

Continuing operations $ 0.82 $ 0.36 $ 1.23 $ 0.45

Discontinued operations - - (0.01 ) -

Total $ 0.82 $ 0.36 $ 1.22 $ 0.45

Diluted income (loss) per share:

Continuing operations $ 0.81 $ 0.35 $ 1.22 $ 0.45

Discontinued operations - - (0.01 ) -

Total $ 0.81 $ 0.35 $ 1.21 $ 0.45

Three Months Ended Six Months Ended

March 31, March 31,

Capitalized Interest in 2021 2020 2021 2020Inventory

Capitalized interest ininventory, beginning of $ 119,148 $ 137,010 $ 119,659 $ 136,565 period

Interest incurred 19,345 22,271 39,247 43,827

Interest expense notqualified for (969 ) (1,928 ) (2,569 ) (3,370 )capitalization andincluded as other expense

Capitalized interestamortized to home (24,110 ) (22,660 ) (42,923 ) (42,329 )construction and landsales expenses

Capitalized interest in $ 113,414 $ 134,693 $ 113,414 $ 134,693inventory, end of period

BEAZER HOMES USA, INC. CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited)

in thousands (except share and per share data)

March 31, 2021

September 30, 2020

ASSETS

Cash and cash equivalents

$

355,533

$

327,693

Restricted cash

18,162

14,835

Accounts receivable (net of allowance of $298 and $358, respectively)

17,158

19,817

Income tax receivable

9,203

9,252

Owned inventory

1,383,616

1,350,738

Investments in unconsolidated entities

4,114

4,003

Deferred tax assets, net

213,624

225,143

Property and equipment, net

21,989

22,280

Operating lease right-of-use assets

12,719

13,103

Goodwill

11,376

11,376

Other assets

8,077

9,240

Total assets

$

2,055,571

$

2,007,480

LIABILITIES AND STOCKHOLDERS' EQUITY

Trade accounts payable

$

150,632

$

132,192

Operating lease liabilities

14,603

15,333

Other liabilities

133,568

135,983

Total debt (net of debt issuance costs of $9,980 and $10,891, respectively)

1,123,001

1,130,801

Total liabilities

1,421,804

1,414,309

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, 31,289,296 issued and outstanding and 31,012,326 issued and outstanding, respectively)

31

31

Paid-in capital

860,537

856,466

Accumulated deficit

(226,801

)

(263,326

)

Total stockholders' equity

633,767

593,171

Total liabilities and stockholders' equity

$

2,055,571

$

2,007,480

Inventory Breakdown

Homes under construction

$

653,137

$

525,021

Development projects in progress

517,037

589,763

Land held for future development

23,068

28,531

Land held for sale

8,851

12,622

Capitalized interest

113,414

119,659

Model homes

68,109

75,142

Total owned inventory

$

1,383,616

$

1,350,738

BEAZER HOMES USA, INC.CONDENSED CONSOLIDATED BALANCE SHEETS(Unaudited)



in thousands (except share and per share data) March 31, September 30, 2021 2020

ASSETS

Cash and cash equivalents $ 355,533 $ 327,693

Restricted cash 18,162 14,835

Accounts receivable (net of allowance of $298 and 17,158 19,817 $358, respectively)

Income tax receivable 9,203 9,252

Owned inventory 1,383,616 1,350,738

Investments in unconsolidated entities 4,114 4,003

Deferred tax assets, net 213,624 225,143

Property and equipment, net 21,989 22,280

Operating lease right-of-use assets 12,719 13,103

Goodwill 11,376 11,376

Other assets 8,077 9,240

Total assets $ 2,055,571 $ 2,007,480

LIABILITIES AND STOCKHOLDERS' EQUITY

Trade accounts payable $ 150,632 $ 132,192

Operating lease liabilities 14,603 15,333

Other liabilities 133,568 135,983

Total debt (net of debt issuance costs of $9,980 1,123,001 1,130,801 and $10,891, respectively)

Total liabilities 1,421,804 1,414,309

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, 31,289,296 issued 31 31 and outstanding and 31,012,326 issued andoutstanding, respectively)

Paid-in capital 860,537 856,466

Accumulated deficit (226,801 ) (263,326 )

Total stockholders' equity 633,767 593,171

Total liabilities and stockholders' equity $ 2,055,571 $ 2,007,480



Inventory Breakdown

Homes under construction $ 653,137 $ 525,021

Development projects in progress 517,037 589,763

Land held for future development 23,068 28,531

Land held for sale 8,851 12,622

Capitalized interest 113,414 119,659

Model homes 68,109 75,142

Total owned inventory $ 1,383,616 $ 1,350,738

BEAZER HOMES USA, INC.CONSOLIDATED OPERATING AND FINANCIAL DATA - CONTINUING OPERATIONS

Three Months Ended March 31,

Six Months Ended March 31,

SELECTED OPERATING DATA

2021

2020

2021

2020

Closings:

West region

757

735

1,399

1,429

East region

321

235

544

427

Southeast region

310

307

559

533

Total closings

1,388

1,277

2,502

2,389

New orders, net of cancellations:

West region

1,116

953

1,898

1,690

East region

357

351

677

584

Southeast region

381

357

721

638

Total new orders, net

1,854

1,661

3,296

2,912

As of March 31,

Backlog units at end of period:

2021

2020

West region

1,864

1,243

East region

757

498

Southeast region

682

490

Total backlog units

3,303

2,231

Dollar value of backlog at end of period (in millions)

$

1,386.4

$

895.0

in thousands

Three Months Ended March 31,

Six Months Ended March 31,

SUPPLEMENTAL FINANCIAL DATA

2021

2020

2021

2020

Homebuilding revenue:

West region

$

277,843

$

267,231

$

510,783

$

521,629

East region

151,993

110,011

249,957

187,656

Southeast region

117,581

110,744

210,906

196,100

Total homebuilding revenue

$

547,417

$

487,986

$

971,646

$

905,385

Revenue:

Homebuilding

$

547,417

$

487,986

$

971,646

$

905,385

Land sales and other

2,472

1,427

6,782

1,832

Total revenue

$

549,889

$

489,413

$

978,428

$

907,217

Gross profit:

Homebuilding

$

97,456

$

78,744

$

172,293

$

141,852

Land sales and other

470

101

926

130

Total gross profit

$

97,926

$

78,845

$

173,219

$

141,982

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.

BEAZER HOMES USA, INC.CONSOLIDATED OPERATING AND FINANCIAL DATA - CONTINUING OPERATIONS



Three Months Ended March Six Months Ended March 31, 31,

SELECTED OPERATING DATA 2021 2020 2021 2020

Closings:

West region 757 735 1,399 1,429

East region 321 235 544 427

Southeast region 310 307 559 533

Total closings 1,388 1,277 2,502 2,389



New orders, net of cancellations:

West region 1,116 953 1,898 1,690

East region 357 351 677 584

Southeast region 381 357 721 638

Total new orders, net 1,854 1,661 3,296 2,912

As of March 31,

Backlog units at end of period: 2021 2020

West region 1,864 1,243

East region 757 498

Southeast region 682 490

Total backlog units 3,303 2,231

Dollar value of backlog at end of period (in $ 1,386.4 $ 895.0 millions)

in thousands Three Months Ended March Six Months Ended March 31, 31,

SUPPLEMENTAL FINANCIAL 2021 2020 2021 2020DATA

Homebuilding revenue:

West region $ 277,843 $ 267,231 $ 510,783 $ 521,629

East region 151,993 110,011 249,957 187,656

Southeast region 117,581 110,744 210,906 196,100

Total homebuilding $ 547,417 $ 487,986 $ 971,646 $ 905,385 revenue



Revenue:

Homebuilding $ 547,417 $ 487,986 $ 971,646 $ 905,385

Land sales and other 2,472 1,427 6,782 1,832

Total revenue $ 549,889 $ 489,413 $ 978,428 $ 907,217



Gross profit:

Homebuilding $ 97,456 $ 78,744 $ 172,293 $ 141,852

Land sales and other 470 101 926 130

Total gross profit $ 97,926 $ 78,845 $ 173,219 $ 141,982

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.

Three Months Ended March 31, Six Months Ended March 31,

in thousands 2021 2020 2021 2020

Homebuildinggross profit $ 97,456 17.8 % $ 78,744 16.1 % $ 172,293 17.7 % $ 141,852 15.7 %/margin

Inventoryimpairmentsand - - 465 - abandonments(I&A)

Homebuildinggross profit 97,456 17.8 % 78,744 16.1 % 172,758 17.8 % 141,852 15.7 %/marginbefore I&A

Interestamortized to 24,110 22,660 42,670 42,329 cost ofsales

Homebuildinggross profit/marginbefore I&A $ 121,566 22.2 % $ 101,404 20.8 % $ 215,428 22.2 % $ 184,181 20.3 %and interestamortized tocost ofsales

Reconciliation of Adjusted EBITDA 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 the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective capitalization, tax position, and level of impairments. These EBITDA measures should not be considered alternatives to net income determined in accordance with GAAP as an indicator of operating performance.

Three Months Ended Six Months Ended March LTM Ended March 31, 31,

in thousands 2021 2020 2021 2020 2021 2020

Net income $ 24,528 $ 10,614 $ 36,525 $ 13,360 $ 75,391 $ 27,391

Expense from 7,672 4,170 11,786 3,942 25,508 8,789 income taxes

Interestamortized tohomeconstructionand land sales 24,110 22,660 42,923 42,329 96,256 101,496 expenses andcapitalizedinterestimpaired

Interestexpense not 969 1,928 2,569 3,370 7,667 5,640 qualified forcapitalization

EBIT 57,279 39,372 93,803 63,001 204,822 143,316

Depreciationand 3,683 3,627 6,805 7,054 15,391 16,143 amortization

EBITDA 60,962 42,999 100,608 70,055 220,213 159,459

Stock-basedcompensation 2,549 899 6,060 3,210 12,886 9,442 expense

Loss onextinguishment 563 - 563 - 563 25,136 of debt

Inventoryimpairmentsand - - 465 - 2,576 - abandonments ^(b)

Restructuringand severance - - (10 ) - 1,307 - expenses

Litigationsettlement in 120 - $ 120 $ - 1,380 - discontinuedoperations

Adjusted $ 64,194 $ 43,898 $ 107,806 $ 73,265 $ 238,925 $ 194,037 EBITDA

(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."

View source version on businesswire.com: https://www.businesswire.com/news/home/20210429006025/en/

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