Business Wire | Nov 12, 2020 04:15PM EST

Beazer Homes Reports Strong Fourth Quarter and Full Fiscal 2020 Results

Nov. 12, 2020

ATLANTA--(BUSINESS WIRE)--Nov. 12, 2020--Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the quarter and fiscal year ended September 30, 2020.

"Fiscal 2020 was an extraordinary year for Beazer Homes," said Allan P. Merrill, the company's Chairman and Chief Executive Officer. "While successfully adopting new health and safety procedures to allow us to continue selling, building and delivering homes during the pandemic, we achieved all of the financial objectives we outlined last fall and exited the year positioned to generate higher earnings in fiscal 2021. These results would not have been possible without the creative and tireless efforts of our entire team."

Related to fiscal 2020, Mr. Merrill continued, "For the full year, we generated $53.3 million of net income from continuing operations, grew Adjusted EBITDA by more than 10%, produced a return on assets above 10% and brought our Debt to Adjusted EBITDA ratio below 5 times, fulfilling the financial objectives we established prior to the onset of the pandemic."

Commenting on fiscal 2021, Mr. Merrill said, "We enter fiscal 2021 with the dollar value of our backlog nearly 50% higher than this time last year and expectations for substantially lower interest expense, providing us visibility into double-digit growth in earnings per share - even as we confront a short-term reduction in community count that has been exacerbated by the recent strength in new home orders."

Looking beyond fiscal 2021, Mr. Merrill concluded, "With our deleveraging objective of reducing debt below $1 billion clearly in sight, we expect increased land and development spending during 2021 will allow us to increase the number of lots we own or control through options by year end, which we believe positions us for top and bottom line growth in the years ahead."

Beazer Homes Fiscal 2020 Highlights and Comparison to Fiscal 2019

* Net income from continuing operations of $53.3 million. Net income in fiscal 2020 and fiscal 2019 included one-time items related to loss on debt extinguishment, inventory impairments and abandonments, and restructuring and severance charges. Excluding these items, the Company generated net income from continuing operations of $56.5 million, compared to net income from continuing operations of $38.7 million in fiscal 2019 * Homebuilding revenue of $2.1 billion, up 1.9% * 5,492 new home closings, essentially flat year-over-year * Average selling price of $385.5 thousand, up 2.1% * Homebuilding gross margin was 16.4%, up 650 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 21.0%, up 130 basis points * SG&A as a percentage of total revenue was 11.9%, up 30 basis points * Net new orders of 6,293, up 12.9% on a 14.8% increase in sales/community/month to 3.2 and a 1.7% decrease in average community count to 163 * Dollar value of backlog of $995.3 million, up 49.6%

Beazer Homes Fiscal Fourth Quarter 2020 Highlights and Comparison to Fiscal Fourth Quarter 2019

* Net income from continuing operations of $24.6 million. Net income in fiscal 2020 and fiscal 2019 included one-time items related to loss on debt extinguishment, inventory impairments and abandonments, and restructuring and severance charges. Excluding these items, the Company generated net income from continuing operations of $25.6 million, compared to net income from continuing operations of $23.8 in fiscal fourth quarter 2019 * Homebuilding revenue of $679.1 million, down 12.2% on a 13.8% decrease in home closings to 1,737 and a 1.8% increase in average selling price to $390.9 thousand * Homebuilding gross margin was 17.1%, up 190 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 21.7%, up 180 basis points * SG&A as a percentage of total revenue was 11.1%, up 160 basis points year-over-year * Net new orders of 2,009, up 37.8% on a 52.6% increase in sales/community/month to 4.4 and a 9.7% decrease in average community count to 151 * Unrestricted cash at quarter end was $327.7 million; total liquidity was $577.7 million

The following provides additional details on the Company's performance during the fiscal fourth quarter 2020:

Profitability. Net income from continuing operations was $24.6 million, generating diluted earnings per share of $0.82. Fourth quarter Adjusted EBITDA of $77.1 million was down $5.0 million compared to the same period last year, primarily driven by lower home closings, partially offset by an increase in homebuilding gross margin.

Orders. Due to the high demand experienced during the fourth quarter, net new orders increased to 2,009, up 37.8% from the prior year, achieving the highest fourth quarter level in more than a decade. The increase in net new orders was driven by an increase in the absorption rate to 4.4 sales per community per month, up from 2.9 in the previous year, partially offset by a 9.7% decrease in average community count to 151. The cancellation rate for the quarter was 12.2%, down 410 basis points from the previous year.

Backlog. The dollar value of homes in backlog as of September 30, 2020 increased 49.6% to $995.3 million, or 2,509 homes, compared to $665.1 million, or 1,708 homes, at the same time last year. The average selling price of homes in backlog was $396.7 thousand, up 1.9% year-over-year.

Homebuilding Revenue. Fourth quarter homebuilding revenue was $679.1 million, down 12.2% from the same period last year. The decline in homebuilding revenue was primarily driven by a 13.8% decrease in home closings to 1,737 homes, which is attributed to the decrease in demand during March and April as a result of the COVID-19 pandemic.

Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 21.7% for the fourth quarter, up 180 basis points year-over-year, driven primarily by lower sales incentives and pricing increases.

SG&A Expenses. Selling, general and administrative expenses as a percentage of total revenue was 11.1% for the quarter, up 160 basis points compared to the prior year. This increase was primarily driven by the decrease in home closings and homebuilding revenue in the quarter, while SG&A on an absolute dollar basis was relatively flat.

Liquidity. At the close of the fourth quarter, the Company had $577.7 million of available liquidity, including $327.7 million of unrestricted cash and $250.0 million available on its secured revolving credit facility.

Fiscal Year Results from ContinuingOperations

Year Ended September 30,

2020 2019 Change*

New home orders, net of cancellations 6,293 5,576 12.9 %

Orders per community per month 3.2 2.8 14.8 %

Average active community count 163 166 (1.7 ) %

Cancellation rates 15.8 % 16.1 % -30 bps



Total home closings 5,492 5,500 (0.1 ) %

ASP from closings (in thousands) $ 385.5 $ 377.7 2.1 %

Homebuilding revenue (in millions) $ 2,116.9 $ 2,077.2 1.9 %

Homebuilding gross margin 16.4 % 9.9 % 650 bps

Homebuilding gross margin, excluding I&A 16.5 % 15.2 % 130 bps

Homebuilding gross margin, excluding I&A 21.0 % 19.7 % 130 bpsand interest amortized to cost of sales



Income (loss) from continuing operations $ 71.3 $ (116.6 ) $ 187.9 before income taxes (in millions)

Expense (benefit) from income taxes (in $ 18.0 $ (37.2 ) $ 55.2 millions)

Net income (loss) from continuing $ 53.3 $ (79.4 ) $ 132.7 operations (in millions)

Basic income (loss) per share from $ 1.80 $ (2.59 ) $ 4.39 continuing operations

Diluted income (loss) per share from $ 1.78 $ (2.59 ) $ 4.37 continuing operations



Income (loss) from continuing operations $ 71.3 $ (116.6 ) $ 187.9 before income taxes (in millions)

Loss on debt extinguishment, net (in $ - $ (24.9 ) $ 24.9 millions)

Inventory impairments and abandonments $ (2.9 ) $ (148.6 ) $ 145.7 (in millions)

Restructuring and severance charges (in $ (1.3 ) $ - $ (1.3 )millions)

Income from continuing operationsexcluding loss on debt extinguishment,inventory impairments and abandonments, $ 75.5 $ 56.9 $ 18.6 and restructuring and severance chargesbefore income taxes (in millions) ^(a)

Net income from continuing operationsexcluding loss on debt extinguishment,inventory impairments and abandonments, $ 56.5 $ 38.7 $ 17.8 and restructuring and severance chargesafter income taxes (in millions) ^(b)



Net income (loss) (in millions) $ 52.2 $ (79.5 ) $ 131.7



Land and land development spending (in $ 440.8 $ 469.9 $ (29.1 )millions)



Adjusted EBITDA (in millions) $ 204.4 $ 180.2 $ 24.2

* 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 debt and level of impairments. This measure should not be considered an alternative to income (loss) from continuing operations before income taxes determined in accordance with GAAP as an indicator of operating performance.

(b)

For the year ended September 30, 2020, inventory impairments and abandonments and restructuring and severance charges were tax-effected at the effective tax rate of 25.2%. For the year ended September 30, 2019, loss on debt extinguishment and inventory impairments and abandonments were tax-effected at the effective tax rate of 31.9%.

* 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(a) eliminating the differences in companies' respective level of debt and level of impairments. This measure should not be considered an alternative to income (loss) from continuing operations before income taxes determined in accordance with GAAP as an indicator of operating performance.

For the year ended September 30, 2020, inventory impairments and abandonments and restructuring and severance charges were tax-effected at(b) the effective tax rate of 25.2%. For the year ended September 30, 2019, loss on debt extinguishment and inventory impairments and abandonments were tax-effected at the effective tax rate of 31.9%.

Q4 Results from Continuing Operations

Quarter Ended September 30,

2020

2019

Change*

New home orders, net of cancellations

2,009

1,458

37.8

%

Orders per community per month

4.4

2.9

52.6

%

Average active community count

151

168

(9.7

)%

Actual community count at quarter-end

145

166

(12.7

)%

Cancellation rates

12.2

%

16.3

%

-410 bps

Total home closings

1,737

2,014

(13.8

)%

Average selling price (ASP) from closings (in thousands)

$

390.9

$

383.8

1.8

%

Homebuilding revenue (in millions)

$

679.1

$

773.0

(12.2

)%

Homebuilding gross margin

17.1

%

15.2

%

190 bps

Homebuilding gross margin, excluding impairments and abandonments (I&A)

17.2

%

15.2

%

200 bps

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

21.7

%

19.9

%

180 bps

Income from continuing operations before income taxes (in millions)

$

33.7

$

9.5

$

24.2

Expense from income taxes (in millions)

$

9.0

$

7.0

$

2.0

Net income from continuing operations (in millions)

$

24.6

$

2.5

$

22.2

Basic income per share from continuing operations

$

0.83

$

0.08

$

0.75

Diluted income per share from continuing operations

$

0.82

$

0.08

$

0.74

Income from continuing operations before income taxes (in millions)

$

33.7

$

9.5

$

24.2

Loss on debt extinguishment (in millions)

$

-

$

(25.5

)

$

25.5

Inventory impairments and abandonments (in millions)

$

(0.6

)

$

-

$

(0.6

)

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

$

34.3

$

35.0

$

(0.7

)

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

$

25.6

$

23.8

$

1.8

Net income (in millions)

$

23.7

$

2.4

$

21.2

Land and land development spending (in millions)

$

116.1

$

106.3

$

9.8

Adjusted EBITDA (in millions)

$

77.1

$

82.1

$

(5.0

)

Q4 Results from Continuing Operations

Quarter Ended September 30,

2020 2019 Change*

New home orders, net of cancellations 2,009 1,458 37.8 %

Orders per community per month 4.4 2.9 52.6 %

Average active community count 151 168 (9.7 ) %

Actual community count at quarter-end 145 166 (12.7 ) %

Cancellation rates 12.2 % 16.3 % -410 bps



Total home closings 1,737 2,014 (13.8 ) %

Average selling price (ASP) from closings (in $ 390.9 $ 383.8 1.8 %thousands)

Homebuilding revenue (in millions) $ 679.1 $ 773.0 (12.2 ) %

Homebuilding gross margin 17.1 % 15.2 % 190 bps

Homebuilding gross margin, excluding 17.2 % 15.2 % 200 bpsimpairments and abandonments (I&A)

Homebuilding gross margin, excluding I&A and 21.7 % 19.9 % 180 bpsinterest amortized to cost of sales



Income from continuing operations before $ 33.7 $ 9.5 $ 24.2 income taxes (in millions)

Expense from income taxes (in millions) $ 9.0 $ 7.0 $ 2.0

Net income from continuing operations (in $ 24.6 $ 2.5 $ 22.2 millions)

Basic income per share from continuing $ 0.83 $ 0.08 $ 0.75 operations

Diluted income per share from continuing $ 0.82 $ 0.08 $ 0.74 operations



Income from continuing operations before $ 33.7 $ 9.5 $ 24.2 income taxes (in millions)

Loss on debt extinguishment (in millions) $ - $ (25.5 ) $ 25.5

Inventory impairments and abandonments (in $ (0.6 ) $ - $ (0.6 )millions)

Income from continuing operations excludingloss on debt extinguishment, inventoryimpairments and abandonments, and $ 34.3 $ 35.0 $ (0.7 )restructuring and severance charges beforeincome taxes (in millions)^(a)

Net income from continuing operationsexcluding loss on debt extinguishment,inventory impairments and abandonments, and $ 25.6 $ 23.8 $ 1.8 restructuring and severance charges afterincome taxes (in millions)^(b)



Net income (in millions) $ 23.7 $ 2.4 $ 21.2



Land and land development spending (in $ 116.1 $ 106.3 $ 9.8 millions)



Adjusted EBITDA (in millions) $ 77.1 $ 82.1 $ (5.0 )

* 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 debt 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 three months ended September 30, 2020, inventory impairments and abandonments and restructuring and severance charges were tax-effected at the effective tax rate of 25.2%. For the three months ended September 30, 2019, loss on debt extinguishment was tax-effected at the effective tax rate of 31.9%.

* 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 debt and(a) 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 three months ended September 30, 2020, inventory impairments and^ abandonments and restructuring and severance charges were tax-effected at(b) the effective tax rate of 25.2%. For the three months ended September 30, 2019, loss on debt extinguishment was tax-effected at the effective tax rate of 31.9%.

As of September 30,

2020

2019

Change

Backlog units

2,509

1,708

46.9

%

Dollar value of backlog (in millions)

$

995.3

$

665.1

49.6

%

ASP in backlog (in thousands)

$

396.7

$

389.4

1.9

%

Land and lots controlled

17,830

19,875

(10.3)

%

Conference Call

The Company will hold a conference call on November 12, 2020 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 by visiting the "Investor Relations" section of the Company's website at www.beazer.com. To access the conference call by telephone, listeners should dial 800-475-0542 (for international callers, dial 517-308-9429). To be admitted to the call, enter the passcode "8571348." A replay of the conference call will be available, until 10:00 PM ET on November 19, 2020 at 888-562-7249 (for international callers, dial 203-369-3937) 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, saving 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 or increases in the quantity and decreases in the price of new homes and resale homes on the market; (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) 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; (xvi) the results of litigation or government proceedings and fulfillment of any related obligations; (xvii) the impact of construction defect and home warranty claims; (xviii) the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred; (xix) the impact of information technology failures, cybersecurity issues or data security breaches; or (xx) 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 September 30,

2020 2019 Change

Backlog units 2,509 1,708 46.9 %

Dollar value of backlog (in millions) $ 995.3 $ 665.1 49.6 %

ASP in backlog (in thousands) $ 396.7 $ 389.4 1.9 %

Land and lots controlled 17,830 19,875 (10.3) %

Conference Call

The Company will hold a conference call on November 12, 2020 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 by visiting the "Investor Relations" section of the Company's website at www.beazer.com. To access the conference call by telephone, listeners should dial 800-475-0542 (for international callers, dial 517-308-9429). To be admitted to the call, enter the passcode "8571348." A replay of the conference call will be available, until 10:00 PM ET on November 19, 2020 at 888-562-7249 (for international callers, dial 203-369-3937) 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, saving 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 or increases in the quantity and decreases in the price of new homes and resale homes on the market; (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) 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; (xvi) the results of litigation or government proceedings and fulfillment of any related obligations; (xvii) the impact of construction defect and home warranty claims; (xviii) the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred; (xix) the impact of information technology failures, cybersecurity issues or data security breaches; or (xx) 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.

CONSOLIDATED STATEMENTS OF OPERATIONS

Three Months Ended Fiscal Year Ended

September 30, September 30,

in thousands (except 2020 2019 2020 2019per share data)

Total revenue $ 686,748 $ 781,701 $ 2,127,077 $ 2,087,739

Home construction and 569,511 665,404 1,776,534 1,773,085 land sales expenses

Inventory impairments 637 - 2,903 148,618 and abandonments

Gross profit 116,600 116,297 347,640 166,036

Commissions 26,847 29,837 82,507 79,802

General andadministrative 49,361 44,608 170,386 161,371 expenses

Depreciation and 4,806 5,847 15,640 14,759 amortization

Operating income 35,586 36,005 79,107 (89,896 )(loss)

Equity in income ofunconsolidated 209 88 347 404 entities

Loss onextinguishment of - (25,494 ) - (24,920 )debt, net

Other expense, net (2,135 ) (1,092 ) (8,165 ) (2,226 )

Income (loss) fromcontinuing operations 33,660 9,507 71,289 (116,638 )before income taxes

Expense (benefit) 9,033 7,043 17,973 (37,217 )from income taxes

Income (loss) from 24,627 2,464 53,316 (79,421 )continuing operations

Loss fromdiscontinued (949 ) (35 ) (1,090 ) (99 )operations, net oftax

Net income (loss) $ 23,678 $ 2,429 $ 52,226 $ (79,520 )

Weighted-average number of shares:

Basic 29,603 29,545 29,704 30,617

Diluted 30,005 30,169 29,948 30,617

Basic income (loss) per share:

Continuing operations $ 0.83 $ 0.08 $ 1.80 $ (2.59 )

Discontinued (0.03 ) - (0.04 ) (0.01 )operations

Total $ 0.80 $ 0.08 $ 1.76 $ (2.60 )

Diluted income (loss) per share:

Continuing operations $ 0.82 $ 0.08 $ 1.78 $ (2.59 )

Discontinued (0.03 ) - (0.04 ) (0.01 )operations

Total $ 0.79 $ 0.08 $ 1.74 $ (2.60 )

Three Months Ended

Fiscal Year Ended

September 30,

September 30,

Capitalized Interest in Inventory

2020

2019

2020

2019

Capitalized interest in inventory, beginning of period

$

132,096

$

148,825

$

136,565

$

144,645

Interest incurred

20,385

26,464

87,224

103,970

Capitalized interest impaired

-

-

(792

)

(13,907

)

Interest expense not qualified for capitalization and included as other expense

(2,095

)

(1,309

)

(8,468

)

(3,109

)

Capitalized interest amortized to home construction and land sales expenses

(30,727

)

(37,415

)

(94,870

)

(95,034

)

Capitalized interest in inventory, end of period

$

119,659

$

136,565

$

119,659

$

136,565

Three Months Ended Fiscal Year Ended

September 30, September 30,

Capitalized Interest in 2020 2019 2020 2019Inventory

Capitalized interest ininventory, beginning of $ 132,096 $ 148,825 $ 136,565 $ 144,645 period

Interest incurred 20,385 26,464 87,224 103,970

Capitalized interest - - (792 ) (13,907 )impaired

Interest expense notqualified for (2,095 ) (1,309 ) (8,468 ) (3,109 )capitalization andincluded as other expense

Capitalized interestamortized to home (30,727 ) (37,415 ) (94,870 ) (95,034 )construction and landsales expenses

Capitalized interest in $ 119,659 $ 136,565 $ 119,659 $ 136,565 inventory, end of period

BEAZER HOMES USA, INC.

CONSOLIDATED BALANCE SHEETS

in thousands (except share and per share data)

September 30, 2020

September 30, 2019

ASSETS

Cash and cash equivalents

$

327,693

$

106,741

Restricted cash

14,835

16,053

Accounts receivable (net of allowance of $358 and $304, respectively)

19,817

26,395

Income tax receivable

9,252

4,935

Owned inventory

1,350,738

1,504,248

Investments in unconsolidated entities

4,003

3,962

Deferred tax assets, net

225,143

246,957

Property and equipment, net

22,280

27,421

Operating lease right-of-use assets

13,103

-

Goodwill

11,376

11,376

Other assets

9,240

9,556

Total assets

$

2,007,480

$

1,957,644

LIABILITIES AND STOCKHOLDERS' EQUITY

Trade accounts payable

$

132,192

$

131,152

Operating lease liabilities

15,333

-

Other liabilities

135,983

109,429

Total debt (net of debt issuance costs of $10,891 and $12,470, respectively)

1,130,801

1,178,309

Total liabilities

1,414,309

1,418,890

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, 31,012,326 issued and outstanding and 30,933,110 issued and outstanding, respectively)

31

31

Paid-in capital

856,466

854,275

Accumulated deficit

(263,326

)

(315,552

)

Total stockholders' equity

593,171

538,754

Total liabilities and stockholders' equity

$

2,007,480

$

1,957,644

Inventory Breakdown

Homes under construction

$

525,021

$

507,542

Development projects in progress

589,763

738,201

Land held for future development

28,531

28,531

Land held for sale

12,622

12,662

Capitalized interest

119,659

136,565

Model homes

75,142

80,747

Total owned inventory

$

1,350,738

$

1,504,248

BEAZER HOMES USA, INC.

CONSOLIDATED BALANCE SHEETS

in thousands (except share and per share data) September 30, September 30, 2020 2019

ASSETS

Cash and cash equivalents $ 327,693 $ 106,741

Restricted cash 14,835 16,053

Accounts receivable (net of allowance of $358 and 19,817 26,395 $304, respectively)

Income tax receivable 9,252 4,935

Owned inventory 1,350,738 1,504,248

Investments in unconsolidated entities 4,003 3,962

Deferred tax assets, net 225,143 246,957

Property and equipment, net 22,280 27,421

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

Goodwill 11,376 11,376

Other assets 9,240 9,556

Total assets $ 2,007,480 $ 1,957,644

LIABILITIES AND STOCKHOLDERS' EQUITY

Trade accounts payable $ 132,192 $ 131,152

Operating lease liabilities 15,333 -

Other liabilities 135,983 109,429

Total debt (net of debt issuance costs of $10,891 1,130,801 1,178,309 and $12,470, respectively)

Total liabilities 1,414,309 1,418,890

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, 31,012,326 issued 31 31 and outstanding and 30,933,110 issued andoutstanding, respectively)

Paid-in capital 856,466 854,275

Accumulated deficit (263,326 ) (315,552 )

Total stockholders' equity 593,171 538,754

Total liabilities and stockholders' equity $ 2,007,480 $ 1,957,644



Inventory Breakdown

Homes under construction $ 525,021 $ 507,542

Development projects in progress 589,763 738,201

Land held for future development 28,531 28,531

Land held for sale 12,622 12,662

Capitalized interest 119,659 136,565

Model homes 75,142 80,747

Total owned inventory $ 1,350,738 $ 1,504,248

BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA - CONTINUING OPERATIONS

Quarter Ended September 30,

Fiscal Year Ended September 30,

SELECTED OPERATING DATA

2020

2019

2020

2019

Closings:

West region

958

978

3,206

2,859

East region

398

445

1,045

1,092

Southeast region

381

591

1,241

1,549

Total closings

1,737

2,014

5,492

5,500

New orders, net of cancellations:

West region

1,124

808

3,589

2,983

East region

457

283

1,328

1,152

Southeast region

428

367

1,376

1,441

Total new orders, net

2,009

1,458

6,293

5,576

Fiscal Year Ended September 30,

Backlog units at end of period:

2020

2019

West region

1,365

982

East region

624

341

Southeast region

520

385

Total backlog units

2,509

1,708

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

$

995.3

$

665.1

BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA - CONTINUING OPERATIONS

Quarter Ended Fiscal Year Ended September 30, September 30,

SELECTED OPERATING DATA 2020 2019 2020 2019

Closings:

West region 958 978 3,206 2,859

East region 398 445 1,045 1,092

Southeast region 381 591 1,241 1,549

Total closings 1,737 2,014 5,492 5,500



New orders, net of cancellations:

West region 1,124 808 3,589 2,983

East region 457 283 1,328 1,152

Southeast region 428 367 1,376 1,441

Total new orders, net 2,009 1,458 6,293 5,576



Fiscal Year Ended September 30,

Backlog units at end of period: 2020 2019

West region 1,365 982

East region 624 341

Southeast region 520 385

Total backlog units 2,509 1,708

Dollar value of backlog at end of $ 995.3 $ 665.1 period (in millions)

Quarter Ended September 30,

Fiscal Year Ended September 30,

SUPPLEMENTAL FINANCIAL DATA

2020

2019

2020

2019

Homebuilding revenue:

West region

$

355,448

$

354,880

$

1,180,577

$

1,012,977

East region

180,385

206,939

476,167

506,389

Southeast region

143,227

211,183

460,166

557,879

Total homebuilding revenue

$

679,060

$

773,002

$

2,116,910

$

2,077,245

Revenues:

Homebuilding

$

679,060

$

773,002

$

2,116,910

$

2,077,245

Land sales and other

7,688

8,699

10,167

10,494

Total revenues

$

686,748

$

781,701

$

2,127,077

$

2,087,739

Gross profit:

Homebuilding

$

115,976

$

117,844

$

348,110

$

206,034

Land sales and other

624

(1,547

)

(470

)

(39,998

)

Total gross profit

$

116,600

$

116,297

$

347,640

$

166,036

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.

Quarter Ended September Fiscal Year Ended September 30, 30,

SUPPLEMENTAL FINANCIAL 2020 2019 2020 2019DATA

Homebuilding revenue:

West region $ 355,448 $ 354,880 $ 1,180,577 $ 1,012,977

East region 180,385 206,939 476,167 506,389

Southeast region 143,227 211,183 460,166 557,879

Total homebuilding $ 679,060 $ 773,002 $ 2,116,910 $ 2,077,245 revenue



Revenues:

Homebuilding $ 679,060 $ 773,002 $ 2,116,910 $ 2,077,245

Land sales and other 7,688 8,699 10,167 10,494

Total revenues $ 686,748 $ 781,701 $ 2,127,077 $ 2,087,739



Gross profit:

Homebuilding $ 115,976 $ 117,844 $ 348,110 $ 206,034

Land sales and other 624 (1,547 ) (470 ) (39,998 )

Total gross profit $ 116,600 $ 116,297 $ 347,640 $ 166,036

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.

Quarter Ended September 30, Fiscal Year Ended September 30,

2020 2019 2020 2019

Homebuildinggross profit $ 115,976 17.1 % $ 117,844 15.2 % $ 348,110 16.4 % $ 206,034 9.9 %/margin

Inventoryimpairmentsand 637 - 1,646 110,029 abandonments(I&A)

Homebuildinggross profit 116,613 17.2 % 117,844 15.2 % 349,756 16.5 % 316,063 15.2 %/marginbefore I&A

Interestamortized to 30,701 36,256 94,844 93,875 cost ofsales

Homebuildinggross profit/marginbefore I&A $ 147,314 21.7 % $ 154,100 19.9 % $ 444,600 21.0 % $ 409,938 19.7 %and interestamortized tocost ofsales

Reconciliation of Adjusted EBITDA 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. These EBITDA measures should not be considered alternatives to net income determined in accordance with GAAP as an indicator of operating performance.

The reconciliation of Adjusted EBITDA to total company net income (loss) below differs from prior year, as it reclassifies stock-based compensation expense from an adjustment within EBITDA to an adjustment within Adjusted EBITDA in order to accurately present EBITDA per its definition.

Quarter Ended September Fiscal Year Ended 30, September 30,

2020 2019 2020 2019

Net income (loss) $ 23,678 $ 2,429 $ 52,226 $ (79,520 )

Expense (benefit) from 8,764 7,034 17,664 (37,245 )income taxes

Interest amortized to homeconstruction and land sales 30,727 37,415 95,662 108,941 expenses and capitalizedinterest impaired

Interest expense notqualified for 2,095 1,309 8,468 3,109 capitalization

EBIT 65,264 48,187 174,020 (4,715 )

Depreciation and 4,806 5,847 15,640 14,759 amortization

EBITDA 70,070 54,034 189,660 10,044

Stock-based compensation 5,167 2,533 10,036 10,526 expense

Loss on extinguishment of - 25,494 - 24,920 debt

Inventory impairments and 637 - 2,111 134,711 abandonments ^(a)

Restructuring and severance (44 ) - 1,317 - expenses

Litigation settlement in 1,260 - 1,260 - discontinued operations

Adjusted EBITDA $ 77,090 $ 82,061 $ 204,384 $ 180,201

(a)

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/20201112005950/en/

CONTACT: Beazer Homes USA, Inc. David I. Goldberg Vice President of Treasury and Investor Relations 770-829-3700 investor.relations@beazer.com