Cover Page.
Cover Page. - shares | 3 Months Ended | |
Dec. 31, 2020 | Jan. 26, 2021 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Dec. 31, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-12822 | |
Entity Registrant Name | BEAZER HOMES USA, INC. | |
Entity Central Index Key | 0000915840 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --09-30 | |
Document Fiscal Year Focus | 2021 | |
Amendment Flag | false | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 58-2086934 | |
Entity Address, Address Line One | 1000 Abernathy Road | |
Entity Address, Address Line Two | Suite 260 | |
Entity Address, City or Town | Atlanta | |
Entity Address, State or Province | GA | |
Entity Address, Postal Zip Code | 30328 | |
City Area Code | 770 | |
Local Phone Number | 829-3700 | |
Title of 12(b) Security | Common Stock, $0.001 par value | |
Trading Symbol | BZH | |
Security Exchange Name | NYSE | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 31,244,247 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
ASSETS | ||
Cash and cash equivalents | $ 244,628 | $ 327,693 |
Restricted cash | 17,420 | 14,835 |
Accounts receivable (net of allowance of $348 and $358, respectively) | 18,599 | 19,817 |
Income tax receivable | 9,203 | 9,252 |
Owned inventory | 1,413,990 | 1,350,738 |
Investments in unconsolidated entities | 3,928 | 4,003 |
Deferred tax assets, net | 221,168 | 225,143 |
Property and equipment, net | 22,111 | 22,280 |
Operating lease right-of-use assets | 13,592 | 13,103 |
Goodwill | 11,376 | 11,376 |
Other assets | 8,459 | 9,240 |
Total assets | 1,984,474 | 2,007,480 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Trade accounts payable | 120,863 | 132,192 |
Operating lease liabilities | 15,560 | 15,333 |
Other liabilities | 110,264 | 135,983 |
Total debt (net of debt issuance costs of $10,483 and $10,891, respectively) | 1,131,725 | 1,130,801 |
Total liabilities | 1,378,412 | 1,414,309 |
Stockholders’ equity: | ||
Preferred stock (par value $0.01 per share, 5,000,000 shares authorized, no shares issued) | 0 | 0 |
Common stock (par value $0.001 per share, 63,000,000 shares authorized, 31,253,816 issued and outstanding and 31,012,326 issued and outstanding, respectively) | 31 | 31 |
Paid-in capital | 857,360 | 856,466 |
Accumulated deficit | (251,329) | (263,326) |
Total stockholders’ equity | 606,062 | 593,171 |
Total liabilities and stockholders’ equity | $ 1,984,474 | $ 2,007,480 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
LIABILITIES AND STOCKHOLDERS’ EQUITY | ||
Allowances for accounts receivable | $ 348 | $ 358 |
Unamortized debt issuance expense | $ 10,483 | $ 10,891 |
Preferred stock, par value (in US$ per share) | $ 0.01 | $ 0.01 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Common stock, par value (in US$ per share) | $ 0.001 | $ 0.001 |
Common stock, shares authorized | 63,000,000 | 63,000,000 |
Common stock, shares issued | 31,253,816 | 31,012,326 |
Common stock, shares outstanding | 31,253,816 | 31,012,326 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Operations (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement [Abstract] | ||
Total revenue | $ 428,539 | $ 417,804 |
Home construction and land sales expenses | 352,781 | 354,667 |
Inventory impairments and abandonments | 465 | 0 |
Gross profit | 75,293 | 63,137 |
Commissions | 16,507 | 16,065 |
General and administrative expenses | 37,976 | 39,699 |
Depreciation and amortization | 3,122 | 3,427 |
Operating income | 17,688 | 3,946 |
Equity in loss of unconsolidated entities | (75) | (13) |
Other expense, net | (1,452) | (1,340) |
Income from continuing operations before income taxes | 16,161 | 2,593 |
Expense (benefit) from income taxes | 4,125 | (211) |
Income from continuing operations | 12,036 | 2,804 |
Loss from discontinued operations, net of tax | (39) | (58) |
Net income | $ 11,997 | $ 2,746 |
Weighted average number of shares: | ||
Basic (in shares) | 29,771 | 29,746 |
Diluted (in shares) | 30,086 | 30,138 |
Basic income (loss) per share: | ||
Continuing Operations (in dollars per share) | $ 0.40 | $ 0.09 |
Discontinued operations (in dollars per share) | 0 | 0 |
Total (in dollars per share) | 0.40 | 0.09 |
Diluted income (loss) per share: | ||
Continuing operations (in dollars per share) | 0.40 | 0.09 |
Discontinued operations (in dollars per share) | 0 | 0 |
Total (in dollars per share) | $ 0.40 | $ 0.09 |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) shares in Thousands, $ in Thousands | Total | Common Stock | Paid-in Capital | Accumulated Deficit |
Beginning balance (in shares) at Sep. 30, 2019 | 30,933 | |||
Beginning balance at Sep. 30, 2019 | $ 538,754 | $ 31 | $ 854,275 | $ (315,552) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income and comprehensive income (loss) | 2,746 | 2,746 | ||
Stock-based compensation expense | 2,311 | 2,311 | ||
Exercises of stock options (in shares) | 47 | |||
Exercises of stock options | 173 | 173 | ||
Shares issued under employee stock plans, net (in shares) | 574 | |||
Forfeiture and other settlements of restricted stock (in shares) | (1) | |||
Forfeiture and other settlements of restricted stock | (2,058) | (2,058) | ||
Common stock redeemed for tax liability (in shares) | (170) | |||
Common stock redeemed for tax liability | (2,646) | (2,646) | ||
Ending balance (in shares) at Dec. 31, 2019 | 31,383 | |||
Ending balance at Dec. 31, 2019 | 539,280 | $ 31 | 852,055 | (312,806) |
Beginning balance (in shares) at Sep. 30, 2020 | 31,012 | |||
Beginning balance at Sep. 30, 2020 | 593,171 | $ 31 | 856,466 | (263,326) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||
Net income and comprehensive income (loss) | 11,997 | 11,997 | ||
Stock-based compensation expense | 3,511 | 3,511 | ||
Exercises of stock options (in shares) | 117 | |||
Exercises of stock options | 3 | 3 | ||
Shares issued under employee stock plans, net (in shares) | 411 | |||
Common stock redeemed for tax liability (in shares) | (286) | |||
Common stock redeemed for tax liability | (2,620) | (2,620) | ||
Ending balance (in shares) at Dec. 31, 2020 | 31,254 | |||
Ending balance at Dec. 31, 2020 | $ 606,062 | $ 31 | $ 857,360 | $ (251,329) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Cash flows from operating activities: | ||
Net income | $ 11,997 | $ 2,746 |
Adjustments to reconcile net income to net cash used in operating activities: | ||
Depreciation and amortization | 3,122 | 3,427 |
Stock-based compensation expense | 3,511 | 2,311 |
Inventory impairments and abandonments | 465 | 0 |
Deferred and other income tax expense (benefit) | 4,114 | (228) |
Gain on sale of fixed assets | (95) | (63) |
Change in allowance for doubtful accounts | (10) | 9 |
Equity in loss from unconsolidated entities | 75 | 13 |
Changes in operating assets and liabilities: | ||
Decrease in accounts receivable | 1,228 | 6,947 |
Decrease in income tax receivable | 49 | 303 |
Increase in inventory | (62,661) | (68,999) |
Decrease in other assets | 1,076 | 1,978 |
Decrease in trade accounts payable | (11,329) | (20,999) |
Decrease in other liabilities | (26,120) | (11,975) |
Net cash used in operating activities | (74,578) | (84,530) |
Cash flows from investing activities: | ||
Capital expenditures | (2,953) | (2,632) |
Proceeds from sale of fixed assets | 95 | 66 |
Return of capital from unconsolidated entities | 0 | 19 |
Net cash used in investing activities | (2,858) | (2,547) |
Cash flows from financing activities: | ||
Repayment of debt | 0 | (1,150) |
Repayment of borrowings from credit facility | 0 | (95,000) |
Borrowings from credit facility | 0 | 125,000 |
Debt issuance costs | (427) | 0 |
Tax payments for stock-based compensation awards | (2,620) | (2,646) |
Stock option exercises and other financing activities | 3 | (1,885) |
Net cash (used in) provided by financing activities | (3,044) | 24,319 |
Net decrease in cash, cash equivalents, and restricted cash | (80,480) | (62,758) |
Cash, cash equivalents, and restricted cash at beginning of period | 342,528 | 122,794 |
Cash, cash equivalents, and restricted cash at end of period | $ 262,048 | $ 60,036 |
Description of Business
Description of Business | 3 Months Ended |
Dec. 31, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business Beazer Homes USA, Inc. (“we,” “us,” “our,” “Beazer,” “Beazer Homes” and the “Company”) is a geographically diversified homebuilder with active operations in 13 states within three geographic regions in the United States: the West, East, and Southeast. Our homes are designed to appeal to homeowners at different price points across various demographic segments and are generally offered for sale in advance of their construction. Our objective is to provide our customers with homes that incorporate exceptional value and quality, while seeking to maximize our return on invested capital over the course of a housing cycle. |
Basis of Presentation and Summa
Basis of Presentation and Summary of Significant Accounting Policies | 3 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Summary of Significant Accounting Policies | Basis of Presentation and Summary of Significant Accounting Policies The accompanying unaudited condensed consolidated financial statements of the Company have been prepared in accordance with accounting principles generally accepted in the United States of America (GAAP) for interim financial information and in accordance with the instructions to Form 10-Q and Article 10 of Regulation S-X. The unaudited condensed consolidated financial state ments do not include all of the information and disclosures required by GAAP for complete financial statements. As such, the accompanying unaudited condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's 2020 Annual Report. In the opinion of management, all adjustments, consisting of normal recurring adjustments, necessary for a fair presentation have been included in the accompanying unaudited condensed consolidated financial statements . The results of the Company's consolidated operations presented herein for the three months ended December 31, 2020 are not necessarily indicative of the results to be expected for the full fiscal year due to seasonal variations in our operations and other factors, such as the effects of the coronavirus (“COVID-19”) pandemic and its influence on our future results. Basis of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Beazer Homes USA, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidatio n. Our net income (loss) is equivalent to our comprehensive income (loss), so we have not presented a separate statement of comprehensive income (loss). In the past, we have discontinued homebu ilding operations in various markets. Results from certain of these exited markets are reported as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented (see Note 16 for a further discussion of our discontinued operations). Our fiscal year 2021 began on October 1, 2020 and ends on September 30, 2021. Our fiscal year 2020 began on October 1, 2019 and ended on September 30, 2020. Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make informed estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Accordingly, actual results could differ from these estimates. Share Repurchase Program During the first quarter of fiscal 2019, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $50.0 million of its outstanding common stock. As part of this program, the Company repurchased common stock during fiscal 2019 and 2020 through open market transactions, 10b5-1 plans, and accelerated share repurchase (ASR) agreements. All shares have been retired upon repurchase. The aggregate reduction to stockholders’ equity related to share repurchases during the fiscal year ended September 30, 2020 and September 30, 2019 was $3.3 million and $34.6 million, respectively. No share repurchases were made during the three months ended December 31, 2020. As of December 31, 2020, the remaining availability of the share repurchase program was $12.0 million. Inventory Valuation Inventory assets are assessed for recoverability no less than quarterly in accordance with the policies described in Notes 2 and 5 to the audited consolidated financial statements within our 2020 Annual Report. Homebuilding inventories that are accounted for as held for development (projects in progress) include land and home construction assets grouped together as communities. Homebuilding inventories held for development are stated at cost (including home construction costs, direct overhead costs, capitalized indirect costs, capitalized interest, real estate taxes and allocated lot costs) unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. For communities that have been idled (land held for future development), all applicable carrying costs, such as interest and real estate taxes, are expensed as incurred, and the inventory is stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. We record land held for sale at the lower of the carrying value or fair value less costs to sell. Revenue Recognition We recognize revenue upon the transfer of promised goods to our customers in an amount that reflects the consideration to which we expect to be entitled by applying the following five-step process specified in Accounting Standards Codification Topic 606. • Identify the contract(s) with a customer • Identify the performance obligations • Determine the transaction price • Allocate the transaction price • Recognize revenue when the performance obligations are met The following table presents our total revenue disaggregated by revenue stream: Three Months Ended December 31, in thousands 2020 2019 Homebuilding revenue $ 424,229 $ 417,399 Land sales and other revenue 4,310 405 Total revenue (a) $ 428,539 $ 417,804 (a) Please see Note 15 for total revenue disaggregated by reportable segment. Homebuilding revenue Homebuilding revenue is reported net of any discounts and incentives and is generally recognized when title to and possession of the home are transferred to the buyer at the closing date. The performance obligation to deliver the home is generally satisfied in less than one year from the original contract date. Home sale contract assets consist of cash from home closings held by title companies in escrow for our benefit, typically for less than five days, and are considered accounts receivable. Contract liabilities include customer deposits related to sold but undelivered homes and totaled $22.9 million and $18.9 million as of December 31, 2020 and September 30, 2020, respectively. Of the customer liabilities outstanding as of September 30, 2020, $8.3 million was recognized in revenue during the three months ended December 31, 2020 upon closing of the related homes. Land sales and other revenue Land sales revenue relates to land that does not fit within our homebuilding programs and strategic plans. Land sales typically require cash consideration on the closing date, which is generally when performance obligations are satisfied. We also provide title examinations for our homebuyers in certain markets. Revenues associated with our title operations are recognized as closing services are rendered and title insurance policies are issued, both of which generally occur as each home is closed. Recent Accounting Pronouncements Fair Value Measurements. On October 1, 2020 we adopted Accounting Standards Update (ASU) No. 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework (ASU 2018-13). The updated guidance improves the disclosure requirements for fair value measurements. No retrospective adjustments were required. Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04). ASU 2020-04 provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. This guidance is effective beginning on March 12, 2020, and we may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the effect that the new guidance will have on its consolidated financial statements and related disclosures. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 3 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental Cash Flow Information | Supplemental Cash Flow Information The following table presents supplemental disclosure of non-cash and cash activity as well as a reconciliation of total cash balances between the condensed consolidated balance sheets and condensed consolidated statements of cash flows for the periods presented: Three Months Ended December 31, in thousands 2020 2019 Supplemental disclosure of non-cash activity: Beginning operating lease right-of-use assets (ASC 842 adoption) (a) $ — $ 13,895 Beginning operating lease liabilities (ASC 842 adoption) (a) — 16,028 Increase in operating lease right-of-use assets 1,391 — Increase in operating lease liabilities 1,391 — Supplemental disclosure of cash activity: Interest payments $ 27,048 $ 15,954 Income tax payments — — Tax refunds received 49 303 Reconciliation of cash, cash equivalents, and restricted cash: Cash and cash equivalents $ 244,628 $ 41,277 Restricted cash 17,420 18,759 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 262,048 $ 60,036 (a) On October 1, 2019, we adopted Accounting Standards Update (ASU) No. 2016-02, Leases (ASU 2016-02) and related amendments, collectively codified in ASC 842, Leases (ASC 842). Upon adoption of ASC 842, we recorded net operating lease right-of-use (ROU) assets of $13.9 million and operating lease liabilities of $16.0 million. Existing prepaid rent and accrued rent were recorded as an offset to the gross operating lease ROU assets. |
Investments in Unconsolidated E
Investments in Unconsolidated Entities | 3 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in Unconsolidated Entities | Investments in Unconsolidated Entities Unconsolidated Entities As of December 31, 2020, the Company participated in certain joint ventures and had investments in unconsolidated entities in which it had less than a controlling interest. The following table presents the Company's investment in these unconsolidated entities as well as the total equity and outstanding borrowings of these unconsolidated entities as of December 31, 2020 and September 30, 2020: in thousands December 31, 2020 September 30, 2020 Investment in unconsolidated entities $ 3,928 $ 4,003 Total equity of unconsolidated entities 7,310 7,079 Total outstanding borrowings of unconsolidated entities 10,843 8,807 Equity in income from unconsolidated entity activities included in income from continuing operations is as follows for the periods presented: Three Months Ended December 31, in thousands 2020 2019 Equity in loss of unconsolidated entities $ (75) $ (13) For the three months ended December 31, 2020 and 2019, ther e were no impairments related to investments in unconsolidated entities. Guarantees Historically, the Company's joint ventures typically obtained secured acquisition, development, and construction financing. In addition, the Company and its joint venture partners provided varying levels of guarantees of debt and other debt-related obligations for these unconsolidated entities. However, as of December 31, 2020 and September 30, 2020, the Company had no outstanding guarantees or other debt-related obligations related to our investments in unconsolidated entities. The Company and its joint venture partners generally provide unsecured environmental indemnities to land development joint venture project lenders. These indemnities obligate the Company to reimburse the project lenders for claims related to environmental matters for which they are held responsible. During the three months ended December 31, 2020 and 2019, the Company was not required to make any payments related to environmental indemnities. In assessing the need to record a liability for these guarantees, the Company considers its historical experience in being required to perform under the guarantees, the fair value of the collateral underlying these guarantees, and the financial condition of the applicable unconsolidated entities. In addition, the fair value of the collateral of unconsolidated entities is monitored to ensure that the related borrowings do not exceed the specified percentage of the value of the property securing the borrowings. As of December 31, 2020, no liability was recorded for the contingent aspects of any guarantees that were determined to be reasonably possible but not probable. |
Inventory
Inventory | 3 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory The components of our owned inventory are as follows as of December 31, 2020 and September 30, 2020: in thousands December 31, 2020 September 30, 2020 Homes under construction $ 625,296 $ 525,021 Development projects in progress 563,285 589,763 Land held for future development 23,068 28,531 Land held for sale 10,045 12,622 Capitalized interest 119,148 119,659 Model homes 73,148 75,142 Total owned inventory $ 1,413,990 $ 1,350,738 Homes under construction include homes substantially finished and ready for delivery and homes in various stages of construction, including the cost of the underlying lot. We ha d 109 (with a cost of $34.1 million) and 133 (with a cost of $42.2 million) substantially completed homes that were not subject to a sales contract (spec homes) as of December 31, 2020 and September 30, 2020, respectively. Development projects in progress consist principally of land acquisition, land development and other common costs. These land related costs are allocated to individual lots on a pro-rata basis, and the lot costs are transferred to homes under construction when home construction begins for the respective lots. Certain of the fully developed lots in this category are reserved by a customer deposit or sales contract. Land held for future development consists of communities for which construction and development activities are expected to occur in the future or have been idled and are stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. All applicable carrying costs, such as interest and real estate taxes, are expensed as incurred. Land held for sale includes land and lots that do not fit within our homebuilding programs and strategic plans in certain markets, and land is classified as held for sale once certain criteria are met (refer to Note 2 to the audited consolidated financial statements within our 2020 Annual Report). These assets are recorded at the lower of the carrying value or fair value less costs to sell. The amount of interest we are able to capitalize depends on our qualified inventory balance, which considers the status of our inventory holdings. Our qualified inventory balance includes the majority of our homes under construction and development projects in progress but excludes land held for future development and land held for sale (see Note 6 for additional information on capitalized interest). Total owned inventory by reportable segment is presented in the table below as of December 31, 2020 and September 30, 2020: in thousands Projects in Progress (a) Land Held for Future Development Land Held for Sale Total Owned December 31, 2020 West Segment $ 645,137 $ 3,483 $ 1,775 $ 650,395 East Segment 278,258 14,077 3,844 296,179 Southeast Segment 284,216 5,508 4,426 294,150 Corporate and unallocated (b) 173,266 — — 173,266 Total $ 1,380,877 $ 23,068 $ 10,045 $ 1,413,990 September 30, 2020 West Segment $ 627,986 $ 3,483 $ 4,516 $ 635,985 East Segment 241,799 14,077 3,702 259,578 Southeast Segment 266,905 10,971 4,404 282,280 Corporate and unallocated (b) 172,895 — — 172,895 Total $ 1,309,585 $ 28,531 $ 12,622 $ 1,350,738 (a) Projects in progress include homes under construction, development projects in progress, capitalized interest, and model home categories from the preceding table. (b) Projects in progress amount includes capitalized interest and indirect costs that are maintained within our Corporate and unallocated segment. Inventory Impairments When conducting our community level review for the recoverability of inventory related to projects in progress, we consider both qualitative and quantitative factors to establish a quarterly “watch list” of communities. Each community is evaluated qualitatively and quantitatively to determine if there are factors driving the low profitability levels. Communities with more than ten homes remaining to close with potential indicators of impairment resulting from this initial evaluation are subjected to additional financial and operational reviews that consider the competitive environment and other factors contributing to gross margins below our specified threshold. Our assumptions about future home sales prices and absorption rates require significant judgment because the residential homebuilding industry is cyclical and is highly sensitive to changes in economic conditions. For certain communities, it may be prudent to reduce sales prices or further increase sales incentives in response to a variety of factors, including competitive market conditions in those specific submarkets for the product and locations of these communities. For communities where the current competitive and market dynamics indicate that assets may not be recoverable, a formal impairment analysis is performed. The formal impairment analysis consists of both qualitative competitive market analyses and quantitative analyses reflecting market and asset specific information. The quantitative analyses compare the projected future undiscounted cash flows for each such community with its current carrying value. If the aggregate undiscounted cash flows from our quantitative analyses are in excess of the carrying value, the asset is considered to be recoverable and is not impaired. If the aggregate undiscounted cash flows are less than the carrying value, we perform a discounted cash flow analysis to determine the fair value of the community. We performed our quarterly inventory impairment assessment for the quarter ended December 31, 2020 taking into consideration the qualitative and quantitative factors discussed above, and determined that no community required a formal impairment analysis (projected cash flow analys is). No project in progress impairment charges were recognized during the quarter ended December 31, 2020 and 2019, respectively. However, because the full magnitude and duration of the COVID-19 pandemic is uncertain and difficult to predict, changes in our cash flow projections may change our conclusions on the recoverability of inventory in the future, and we may recognize charges in future periods for inventory impairments related to our current inventory assets. Any such charges could be material to our consolidated financial statements. Impairments on land held for sale generally represent write downs of these properties to net realizable value based on sales contracts, letters of intent, current market conditions, and recent comparable land sale transactions, as applicable. Absent an executed sales contract, our assumptions related to land sales prices require significant judgment because the real estate market is highly sensitive to changes in economic conditions, and our estimates of sale prices could differ significantly from actual results. There were no land held for sale impairment charges recognized during the quarter ended December 31, 2020 and 2019, respective From time-to-time, we may determine to abandon lots or not exercise certain option contracts that are not projected to produce adequate results, no longer fit with our long-term strategic plan. Additionally, in certain limited instances, we are forced to abandon lots due to seller non-performance, or permitting or other regulatory issues that do not allow us to build on those lots. If we intend to abandon or walk away from a property, we record an abandonment charge to earnings for the deposit amount and any related capitalized costs in the period such decision is made. During the quarter ended December 31, 2020, we recognized $0.5 million abandonment charges in the East reportable segment related to one under contract land acquisition deal that we decided to terminate. There were no such abandonment charges during the quarter ended December 31, 2019. Lot Option Agreements and Variable Interest Entities (VIE) As previously discussed, we also have access to land inventory through lot option contracts, which generally enable us to defer acquiring portions of properties owned by third parties and unconsolidated entities until we have determined whether to exercise our lot option. The majority of our lot option contracts require a non-refundable cash deposit or irrevocable letter of credit based on a percentage of the purchase price of the land for the right to acquire lots during a specified period of time at a specified price. Under lot option contracts, purchase of the properties is contingent upon satisfaction of certain requirements by us and the sellers. Our liability under option contracts is generally limited to forfeiture of the non-refundable deposits, letters of credit, and other non-refundable amounts incurred. We expect to exercise, subject to market conditions and seller satisfaction of contract terms, most of our remaining option contracts. Various factors, some of which are beyond our control, such as market conditions, weather conditions, and the timing of the completion of development activities, will have a significant impact on the timing of option exercises or whether lot options will be exercised at all. The following table provides a summary of our interests in lot option agreements as of December 31, 2020 and September 30, 2020: in thousands Deposits & Remaining As of December 31, 2020 Unconsolidated lot option agreements $ 83,016 $ 493,845 As of September 30, 2020 Unconsolidated lot option agreements $ 75,921 $ 395,133 |
Interest
Interest | 3 Months Ended |
Dec. 31, 2020 | |
Real Estate [Abstract] | |
Interest | Interest Interest capitalized during the three months ended December 31, 2020 and 2019 was limited by the balance of inventory eligible for capitalization. The following table presents certain information regarding interest for the periods presented: Three Months Ended December 31, in thousands 2020 2019 Capitalized interest in inventory, beginning of period $ 119,659 $ 136,565 Interest incurred 19,902 21,556 Interest expense not qualified for capitalization and included as other expense (a) (1,600) (1,442) Capitalized interest amortized to home construction and land sales expenses (b) (18,813) (19,669) Capitalized interest in inventory, end of period $ 119,148 $ 137,010 (a) The amount of interest capitalized depends on the qualified inventory balance, which considers the status of the Company's inventory holdings. Qualified inventory balance includes the majority of homes under construction and development projects in progress but excludes land held for future development and land held for sale. (b) Capitalized interest amortized to home construction and land sales expenses varies based on the number of homes closed during the period and land sales, if any, as well as other factors. |
Borrowings
Borrowings | 3 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Borrowings | Borrowings The Company's debt, net of unamortized debt issuance costs consisted of the following as of December 31, 2020 and September 30, 2020: in thousands Final Maturity Date December 31, 2020 September 30, 2020 Senior Unsecured Term Loan (Term Loan) September 2022 $ 100,000 $ 100,000 6 3/4% Senior Notes (2025 Notes) March 2025 229,555 229,555 5 7/8% Senior Notes (2027 Notes) October 2027 394,000 394,000 7 1/4% Senior Notes (2029 Notes) October 2029 350,000 350,000 Unamortized debt issuance costs (10,483) (10,891) Total Senior Notes, net 1,063,072 1,062,664 Junior Subordinated Notes (net of unamortized accretion of $32,120 and $32,636, respectively) July 2036 68,653 68,137 Revolving Credit Facility February 2023 — — Total debt, net $ 1,131,725 $ 1,130,801 Secured Revolving Credit Facility The Secured Revolving Credit Facility (the Facility) provides working capital and letter of credit capacity of $250.0 million. The Facility is currently with four lenders. For additional discussion of the Facility, refer to Note 8 to the audited consolidated financial statements within our 2020 Annual Report. On October 8, 2020, the Company executed a Ninth Amendment to the Facility. The Ninth Amendment (1) extended the termination date of the Facility from February 15, 2022 to February 15, 2023; (2) permits the maximum aggregate amount of commitments under the Credit Agreement to be increased to up to $300.0 million pursuant to one or more additional incremental increases, subject to the approval of any lenders providing such increases; and (3) revises the minimum liquidity covenant such that if the interest coverage ratio is greater than or equal to 1.00 to 1.00 and the housing collateral ratio is greater than or equal to 1.75 to 1.00, the Company is required to maintain minimum liquidity of $50.0 million; and in all other cases, the Company is required to maintain minimum liquidity of $100.0 million. As of December 31, 2020, no borrowings and no letters of credit were outstanding under the Facility, resulting in $250.0 million remaining capacity. As of September 30, 2020, no borrowings and no letters of credit were outstanding under the Facility. The Facility requires compliance with certain covenants, including negative covenants and financial covenants. As of December 31, 2020, the Company believes it was in compliance with all such covenants. Senior Unsecured Term Loan On September 9, 2019, the Company entered into a term loan agreement, which provides for a Senior Unsecured Term Loan (the Term Loan). The principal balance as of December 31, 2020 was $100.0 million . The Term Loan (1) will mature in September 2022, with remaining $50.0 million annual repayment installments in September 2021 and September 2022; (2) bears interest at a fixed rate of 4.875%; and (3) includes an option to prepay, subject to certain conditions and the payment of certain premiums. The Term Loan contains covenants generally consistent with the covenants contained in the Facility. As of December 31, 2020, the Company believes it was in compliance with all such covenants. Letter of Credit Facilities The Company has entered into stand-alone, cash-secured letter of credit agreements with banks to maintain pre-existing letters of credit and to provide for the issuance of new letters of credit (in addition to the letters of credit issued under the Facility). As of December 31, 2020 and September 30, 2020, the Company had letters of credit outstanding under these additional facilities of $11.7 million and $12.7 million, respectively, all of which were secured by cash collateral in restricted accounts. The Company may enter into additional arrangements to provide additional letter of credit capacity. In May 2018, the Company entered into a reimbursement agreement, which provides for the issuance of performance letters of credit, and an unsecured credit agreement that provides for the issuance of up to $50.0 million of standby letters of credit to backstop the Company's obligations under the reimbursement agreement (collectively, the "Bilateral Facility"). On June 17, 2020, the Company executed an Amendment No. 1 to the Bilateral Facility that extends the termination date of the agreement from June 10, 2021 to June 10, 2022. As of December 31, 2020, the total stated amount of performance letters of credit issued under the reimbursement agreement was $25.7 million (and the stated amount of the backstop standby letter of credit issued under the credit agreement was $40.0 million). The Company may enter into additional arrangements to provide greater letter of credit capacity. Senior Notes The Company's Senior Notes are unsecured obligations ranking pari passu with all other existing and future senior indebtedness. Substantially all of the Company's significant subsidiaries are full and unconditional guarantors of the Senior Notes and are jointly and severally liable for obligations under the Senior Notes and the Facility. Each guarantor subsidiary is a 100% owned subsidiary of Beazer Homes. All unsecured Senior Notes rank equally in right of payment with all existing and future senior unsecured obligations, senior to all of the Company's existing and future subordinated indebtedness and effectively subordinated to the Company's existing and future secured indebtedness, including indebtedness under the Facility, if outstanding, to the extent of the value of the assets securing such indebtedness. The unsecured Senior Notes and related guarantees are structurally subordinated to all indebtedness and other liabilities of all of the Company's subsidiaries that do not guarantee these notes but are fully and unconditionally guaranteed jointly and severally on a senior basis by the Company's wholly-owned subsidiaries party to each applicable indenture. The Company's Senior Notes are issued under indentures that contain certain restrictive covenants which, among other things, restrict our ability to pay dividends, repurchase our common stock, incur certain types of additional indebtedness, and make certain investments. Compliance with the Senior Note covenants does not significantly impact the Company's operations. The Company believes it was in compliance with the covenants contained in the indentures of all of its Senior Notes as of December 31, 2020. For additional redemption features, refer to the table below that summarizes the redemption terms of our Senior Notes: Senior Note Description Issuance Date Maturity Date Redemption Terms 6 3/4% Senior Notes March 2017 March 2025 On or prior to March 15, 2020, we may redeem up to 35% of the aggregate principal amount of the 2025 Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 106.750% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date, provided at least 65% of the aggregate principal amount of the 2025 Notes originally issued remains outstanding immediately after such redemption. Callable at any time prior to March 15, 2020, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after March 15, 2020, callable at a redemption price equal to 105.063% of the principal amount; on or after March 15, 2021, callable at a redemption price equal to 103.375% of the principal amount; on or after March 15, 2022, callable at a redemption price equal to 101.688% of the principal amount; on or after March 15, 2023, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest. 5 7/8% Senior Notes October 2017 October 2027 On or prior to October 15, 2022, we may redeem up to 35% of the aggregate principal amount of the 2027 Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 105.875% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date, provided at least 65% of the aggregate principal amount of the 2027 Notes originally issued remains outstanding immediately after such redemption. Callable at any time prior to October 15, 2022, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2022, callable at a redemption price equal to 102.938% of the principal amount; on or after October 15, 2023, callable at a redemption price equal to 101.958% of the principal amount; on or after October 15, 2024, callable at a redemption price equal to 100.979% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest. 7 1/4% Senior Notes September 2019 October 2029 On or prior to October 15, 2022, we may redeem up to 35% of the aggregate principal amount of the 2029 Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 107.250% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date, provided at least 65% of the aggregate principal amount of the 2029 Notes originally issued remains outstanding immediately after such redemption. Callable at any time prior to October 15, 2024, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2024, callable at a redemption price equal to 103.625% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 102.417% of the principal amount; on or after October 15, 2026, callable at a redemption price equal to 101.208% of the principal amount; on or after October 15, 2027, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest. Junior Subordinated Notes The Company's unsecured junior subordinated notes (Junior Subordinated Notes) mature on July 30, 2036. The Junior Subordinated Notes are redeemable at par and paid interest at a fixed rate of 7.987% for the first ten years ending July 30, 2016. The securities now have a floating interest rate as defined in the Junior Subordinated Notes Indenture, which was a weighted-average o f 4.25% as of December 31, 2020. The obligations relating to these notes are subordinated to the Facility and the Senior Notes. In January 2010, the Company modified the terms of $75.0 million of these notes and recorded them at their then estimated fair value. Over the remaining life of the Junior Subordinated Notes, we will increase their carrying value until this carrying value equals the face value of the notes. As of December 31, 2020, the unamortized accretion was $32.1 million and will be amortized over the remaining life of the notes. As of December 31, 2020, the Company believes it was in compliance with all covenants under the Junior Subordinated Notes. |
Operating Leases
Operating Leases | 3 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Operating Leases | Operating Leases The Company leases certain office space and equipment under operating leases for use in our operations. We recognize operating lease expense on a straight-line basis over the lease term. Certain of our lease agreements include one or more options to renew. The exercise of lease renewal options is generally at our discretion. Variable lease expense primarily relates to maintenance and other monthly expense that do not depend on an index or rate. We determine if an arrangement is a lease at contract inception. Lease and non-lease components are accounted for as a single component for all leases. Operating lease ROU assets and liabilities are recognized at the lease commencement date based on the present value of the future lease payments over the expected lease term, which includes optional renewal periods if we determine it is reasonably certain that the option will be exercised. As our leases do not provide an implicit rate, the discount rate used in the present value calculation represents our incremental borrowing rate determined using information available at the commencement date. Operating lease expense is included as a component of general and administrative expenses in our condensed consolidated statements of operations. For the three months ended December 31, 2020, we recorded operating lease expense of $1.1 million. Cash payments on lease liabilities during the three months ended December 31, 2020 totaled $1.4 million. Sublease income and variable lease expenses are de minimis. At December 31, 2020, weighted-average remaining lease term and discount rate were as follows: Weighted-average remaining lease term 5.1 years Weighted-average discount rate 4.77% The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of December 31, 2020: Fiscal Years Ending September 30, in thousands 2021 (a) $ 3,364 2022 4,053 2023 3,254 2024 2,121 2025 1,824 Thereafter 3,000 Total lease payments 17,616 Less: Imputed interest 2,056 Total operating lease liabilities $ 15,560 (a) Remaining lease payments are for the period beginning January 1, 2021 through September 30, 2021 |
Contingencies
Contingencies | 3 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Beazer Homes and certain of its subsidiaries have been and continue to be named as defendants in various construction defect claims, complaints, and other legal actions. The Company is subject to the possibility of loss contingencies related to these defects as well as others arising from its business. In determining loss contingencies, we consider the likelihood of loss and our ability to reasonably estimate the amount of such loss. An estimated loss is recorded when it is considered probable that a liability has been incurred and the amount of loss can be reasonably estimated. Warranty Reserves We currently provide a limited warranty ranging from one Our homebuilding work is performed by subcontractors who typically must agree to indemnify us with regard to their work and provide certificates of insurance demonstrating that they have met our insurance requirements and have named us as an additional insured under their policies. Therefore, many claims relating to workmanship and materials that result in warranty spending are the primary responsibility of these subcontractors. In addition, we maintain insurance coverage related to our construction efforts that can result in recoveries of warranty and construction defect costs above certain specified limits. Warranty reserves are included in other liabilities within the condensed consolidated balance sheets, and the provision for warranty accruals is included in home construction expenses in the condensed consolidated statements of operations. Reserves covering anticipated warranty expenses are recorded for each home closed. Management assesses the adequacy of warranty reserves each reporting period based on historical experience and the expected costs to remediate potential claims. Our review includes a quarterly analysis of the historical data and trends in warranty expense by division. Such analysis considers market-specific factors such as warranty experience, the number of home closings, the prices of homes, product mix, and other data in estimating warranty reserves. In addition, the analysis also contemplates the existence of any non-recurring or community-specific warranty-related matters that might not be included in historical data and trends. While estimated warranty liabilities are adjusted each reporting period based on the results of our quarterly analyses, we may not accurately predict actual warranty costs, which could lead to significant changes in the reserve. Changes in warranty reserves are as follows for the periods presented: Three Months Ended December 31, in thousands 2020 2019 Balance at beginning of period $ 13,052 $ 13,388 Accruals for warranties issued (a) 2,254 1,665 Changes in liability related to warranties existing in prior periods 377 67 Payments made (3,067) (2,474) Balance at end of period $ 12,616 $ 12,646 (a) Accruals for warranties issued are a function of the number of home closings in the period, the selling prices of the homes closed, and the rates of accrual per home estimated as a percentage of the selling price of the home. Insurance Recoveries The Company has insurance policies that provide for the reimbursement of certain warranty costs incurred above specified thresholds for each period covered. Amounts recorded for anticipated insurance recoveries are reflected within the condensed consolidated statements of income as a reduction of home construction expenses. Amounts not yet received from our insurer are recorded on a gross basis, without any reduction for the associated warranty expense, within accounts receivable on our condensed consolidated balance sheets. Litigation In the normal course of business, we are subject to various lawsuits. We cannot predict or determine the timing or final outcome of these lawsuits or the effect that any adverse findings or determinations in pending lawsuits may have on us. In addition, an estimate of possible loss or range of loss, if any, cannot presently be made with respect to certain of these pending matters. An unfavorable determination in any of the pending lawsuits could result in the payment by us of substantial monetary damages that may not be fully covered by insurance. Further, the legal costs associated with the lawsuits and the amount of time required to be spent by management and our Board of Directors on these matters, even if we are ultimately successful, could have a material adverse effect on our financial condition, results of operations, or cash flows. Claims Related to Inventory Impairment Charges. During the quarter ended March 31, 2019, we recognized inventory impairment charges related to 15 communities in California, all of which were previously land held for future development assets. Related to these inventory impairment charges, on June 5, 2019, a putative class action lawsuit was filed against Beazer Homes USA, Inc. and certain of our officers in the U.S. District Court for the Southern District of New York. The proposed class consisted of all persons and entities that acquired our securities between August 1, 2014 and May 2, 2019. On October 18, 2019, the plaintiffs filed a notice of voluntary dismissal of this case, and the Court subsequently entered an order dismissing the case. Beginning June 25, 2019, several shareholder derivative lawsuits relating to the same inventory impairment charges discussed above were filed against Beazer Homes USA, Inc., certain of our officers and members of our Board of Directors in the U.S. District Court for the Northern District of Georgia. The plaintiffs in these cases allege breaches of fiduciary duty, unjust enrichment and violations of the federal securities laws. These federal actions have been consolidated into a single derivative action. Additionally, a substantially similar derivative action has been filed in the Superior Court of Fulton County, Georgia. The plaintiffs in each of these actions seek, among other things, monetary damages, disgorgement of profits and attorneys’ and experts’ fees, but do not specify any specific amounts. On October 5, 2020, the Court granted a motion to dismiss the consolidated federal action but provided the plaintiffs an opportunity to attempt to amend their complaint. An amended complaint was filed in late October, and a motion to dismiss this amended complaint is pending. We continue to believe the allegations are without merit and intend to vigorously defend against the claims. However, because the outcome of these legal proceedings cannot be predicted with certainty, we have determined that the amount of any possible losses or range of possible losses in connection with these matters is not reasonably estimable. Other Matters We and certain of our subsidiaries have been named as defendants in various claims, complaints, and other legal actions, most relating to construction defects, moisture intrusion, and product liability. Certain of the liabilities resulting from these actions are covered in whole or in part by insurance. In our opinion, based on our current assessment, the ultimate resolution of these matters will not have a material adverse effect on our financial condition, results of operations, or cash flows. We have an accrual of $5.1 million and $5.0 million in other liabilities on our condensed consolidated balance sheets related to litigation and other matters, excluding warranty, as of December 31, 2020 and September 30, 2020, respectively. We had outstanding letters of credit and surety bonds of approximat ely $37.4 million and $257.3 million, r espectively, as of December 31, 2020, related principally to our obligations to local governments to construct roads and other improvements in various developments. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements As of the dates presented, we had assets on our condensed consolidated balance sheets that were required to be measured at fair value on a recurring or non-recurring basis. We use a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities; • Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with market data; and • Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability. Certain of our assets are required to be recorded at fair value on a recurring basis. The fair value of our deferred compensation plan assets is based on market-corroborated inputs (Level 2). Certain of our assets are required to be recorded at fair value on a non-recurring basis when events and circumstances indicate that the carrying value of these assets may not be recovered. We review our long-lived assets, including inventory, for recoverability when factors indicate an impairment may exist, but no less than quarterly. Fair value on assets deemed to be impaired is determined based upon the type of asset being evaluated. Fair value of our owned inventory assets, when required to be calculated, is further discussed within Notes 2 and 5. The fair value of our investments in unconsolidated entities is determined primarily using a discounted cash flow model to value the underlying net assets of the respective entities. Due to the substantial use of unobservable inputs in valuing the assets on a non-recurring basis, they are classified within Level 3. During the three months ended December 31, 2020 and 2019 we recognized no i mpairments on projects in process or land held for sale. Determining within which hierarchical level an asset or liability falls requires significant judgment. We evaluate our hierarchy disclosures each quarter. The following table presents the period-end balances of assets measured at fair value on a recurring basis and the impairment-date fair value of certain assets measured at fair value on a non-recurring basis for each hierarchy level. These balances represent only those assets whose carrying values were adjusted to fair value during the periods presented: in thousands Level 1 Level 2 Level 3 Total As of December 31, 2020 Deferred compensation plan assets (a) $ — $ 2,552 $ — $ 2,552 As of September 30, 2020 Deferred compensation plan assets (a) $ — $ 2,339 $ — $ 2,339 Land held for sale (b) — — 6,240 (c) 6,240 (a) Measured at fair value on a recurring basis. (b) Measured at fair value on a non-recurring basis, including the capitalized interest and indirect costs related to the asset. (c) Amount represents the impairment-date fair value of the land held for sale assets that were impaired during the period indicated. The fair value of cash and cash equivalents, restricted cash, accounts receivable, trade accounts payable, other liabilities, amounts due under the Facility (if outstanding), and other secured notes payable approximate their carrying amounts due to the short maturity of these assets and liabilities. When outstanding, obligations related to land not owned under option agreements approximate fair value. The following table presents the carrying value and estimated fair value of certain other financial liabilities as of December 31, 2020 and September 30, 2020: As of December 31, 2020 As of September 30, 2020 in thousands Carrying Amount (a) Fair Value Carrying Amount (a) Fair Value Senior Notes and Term Loan (b) $ 1,063,072 $ 1,147,058 $ 1,062,664 $ 1,098,117 Junior Subordinated Notes (c) 68,653 68,653 68,137 68,137 Total $ 1,131,725 $ 1,215,711 $ 1,130,801 $ 1,166,254 (a) Carrying amounts are net of unamortized debt issuance costs or accretion. (b) The estimated fair value for our publicly-held Senior Notes and the Term Loan have been determined using quoted market rates (Level 2). (c) Since there is no trading market for our Junior Subordinated Notes, the fair value of these notes is estimated by discounting scheduled cash flows through maturity (Level 3). The discount rate is estimated using market rates currently being offered on loans with similar terms and credit quality. Judgment is required in interpreting market data to develop these estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange. |
Income Taxes
Income Taxes | 3 Months Ended |
Dec. 31, 2020 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes Income Tax Provision The Company's income tax provision for quarterly interim periods is based on an estimated annual effective income tax rate calculated separately from the effect of significant, infrequent, or unusual items. The total income tax provision, including discontinued operations, was a tax expense of $4.1 million for the three months ended December 31, 2020, compared to an income tax benefit of $0.2 million for the three months ended December 31, 2019. Income tax expense for the three months ended December 31, 2020 was substantially driven by (1) income from continuing operations, and (2) the discrete impact related to stock-based compensation expense as a result of current period activity. Income tax benefit for the three months ended December 31, 2019 was primarily driven by (1) the completion of work necessary to claim an additional $0.7 million in tax credits related to prior fiscal years, and (2) the discrete impact related to stock-based compensation expense as a result of current period activity, partially offset by (3) income from continuing operations. Deferred Tax Assets and Liabilities The Company continues to evaluate its deferred tax assets each period to determine if a valuation allowance is required based on whether it is more likely than not that some portion of these deferred tax assets will not be realized. As of December 31, 2020, management concluded that it is more likely than not that a substantial portion of our deferred tax assets will be realized. As part of our analysis, we considered both positive and negative factors that impact profitability and whether those factors would lead to a change in the estimate of our deferred tax assets that may be realized in the future. As we continue to monitor the impacts of the COVID-19 pandemic on our business, any sustained or prolonged reductions in future earnings periods may change our conclusions on whether we are more likely than not to realize portions of our deferred tax assets. At this time, our conclusions on the valuation allowance and Internal Revenue Code Section 382 limitations related to our deferred tax assets remain consistent with the determinations we made during the period ended September 30, 2020, and such conclusions are based on similar company specific and industry factors to those discussed in Note 13 to the audited consolidated financial statements within our 2020 Annual Report. |
Stock-based Compensation
Stock-based Compensation | 3 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Stock-based Compensation | Stock-based Compensation Stock-based compensation expense is included in general and administrative expenses in the condensed consolidated statements of operations. Following is a summary of stock-based compensation expense related to stock options and restricted stock awards for the three months ended December 31, 2020 and December 31, 2019, respectively. Three Months Ended December 31, in thousands 2020 2019 Stock-based compensation expense $ 3,511 $ 2,311 Stock Options Following is a summary of stock option activity for the three months ended December 31, 2020: Three Months Ended December 31, 2020 Shares Weighted Average Outstanding at beginning of period 392,465 $ 15.47 Exercised (116,465) 13.33 Outstanding at end of period 276,000 $ 16.37 Exercisable at end of period 269,498 $ 16.53 Vested or expected to vest in the future 275,783 $ 16.38 As of December 31, 2020 and September 30, 2020, unrecognized compensation costs related to unvested stock options were less than $0.1 million. The remaining costs as of December 31, 2020 are expected to be recognized over a weighted-average period of 0.66 years . Restricted Stock Awards During the three months ended December 31, 2020, the Company issued time-based restricted stock awards. The time-based restricted shares granted to our non-employee directors vest on the first anniversary of the grant, while the time-based restricted shares granted to our executive officers and other employees generally vest ratably over three years from the date of grant. Performance-based restricted share awards vest subject to the achievement of performance and market conditions over a three-year period. Following is a summary of restricted stock activity for the three months ended December 31, 2020: Three Months Ended December 31, 2020 Performance-Based Restricted Shares Time-Based Restricted Shares Total Restricted Shares Beginning of period 796,024 610,130 1,406,154 Granted (a) 164,296 246,550 410,846 Vested (222,165) (277,857) (500,022) End of period 738,155 578,823 1,316,978 (a) Each of our performance-based restricted share represents a contingent right to receive one share of the Company's common stock if vesting is satisfied at the end of the three-year performance period. Our performance stock award plans provide that any performance shares earned in excess of the target number of performance shares issued may be settled in cash or additional shares at the discretion of the Compensation Committee. In November 2020, we issued 60,930 shares earned above target level based on the performance level achieved under the fiscal 2018 performance-based award plan. As of December 31, 2020 and September 30, 2020, total unrecognized compensation costs related to unvested restricted stock awards w as $12.5 million and $9.0 million, respectively. The remaining costs as of December 31, 2020 are expected to be recognized over a weighted average period of 1.92 years. |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share Basic income (loss) per share is calculated by dividing net income (loss) by the weighted-average number of shares outstanding during the period. Diluted income (loss) per share adjusts the basic income (loss) per share for the effects of any potentially dilutive securities in periods in which the Company has net income and such effects are dilutive under the treasury stock method. Following is a summary of the components of basic and diluted income (loss) per share for the periods presented: Three Months Ended December 31, in thousands, except per share data 2020 2019 Numerator: Income from continuing operations $ 12,036 $ 2,804 Loss from discontinued operations, net of tax (39) (58) Net income $ 11,997 $ 2,746 Denominator: Basic weighted-average shares 29,771 29,746 Dilutive effect of restricted stock awards 294 353 Dilutive effect of stock options 21 39 Diluted weighted-average shares (a) 30,086 30,138 Basic income (loss) per share: Continuing operations $ 0.40 $ 0.09 Discontinued operations — — Total $ 0.40 $ 0.09 Diluted income (loss) per share: Continuing operations $ 0.40 $ 0.09 Discontinued operations — — Total $ 0.40 $ 0.09 (a) The following potentially dilutive shares were excluded from the calculation of diluted income (loss) per share as a result of their anti-dilutive effect. Three Months Ended December 31, in thousands 2020 2019 Stock options 242,793 210,509 |
Other Liabilities
Other Liabilities | 3 Months Ended |
Dec. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Other Liabilities | Other Liabilities Other liabilities include the following as of December 31, 2020 and September 30, 2020: in thousands December 31, 2020 September 30, 2020 Accrued compensations and benefits $ 26,826 $ 50,246 Customer deposits 22,917 18,937 Accrued interest 15,613 23,870 Warranty reserve 12,616 13,052 Litigation accruals 5,066 4,981 Income tax liabilities 722 584 Other 26,504 24,313 Total $ 110,264 $ 135,983 |
Segment Information
Segment Information | 3 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information We currently operate in 13 states that are grouped into three homebuilding segments based on geography. Revenues from our homebuilding segments are derived from the sale of homes that we construct and from land and lot sales. Our reportable segments have been determined on a basis that is used internally by management for evaluating segment performance and resource allocations. We have considered the applicable aggregation criteria and have combined our homebuilding operations into three reportable segments as follows: West : Arizona, California, Nevada, and Texas East : Delaware, Indiana, Maryland, New Jersey (a) , Tennessee, and Virginia Southeast : Florida, Georgia, North Carolina, and South Carolina (a) During our fiscal 2015, we made the decision that we would not continue to reinvest in new homebuilding assets in our New Jersey division; therefore, it is no longer considered an active operation. However, it is included in this listing because the segment information below continues to include New Jersey. Management’s evaluation of segment performance is based on segment operating income (loss). Operating income (loss) for our homebuilding segments is defined as homebuilding and land sales and other revenue less home construction, land development, and land sales expense, commission expense, depreciation and amortization, and certain G&A expenses that are incurred by or allocated to our homebuilding segments. The accounting policies of our segments are those described in Note 2 to the consolidated financial statements within our 2020 Annual Report. The following tables contain our revenue, operating income, and depreciation and amortization by segment for the periods presented: Three Months Ended December 31, in thousands 2020 2019 Revenue West $ 236,880 $ 254,398 East 97,964 78,040 Southeast 93,695 85,366 Total revenue $ 428,539 $ 417,804 Three Months Ended December 31, in thousands 2020 2019 Operating income (loss) West $ 33,303 $ 30,331 East 11,368 5,321 Southeast 10,308 3,156 Segment total 54,979 38,808 Corporate and unallocated (a) (37,291) (34,862) Total operating income $ 17,688 $ 3,946 Three Months Ended December 31, in thousands 2020 2019 Depreciation and amortization West $ 1,537 $ 1,808 East 471 554 Southeast 595 540 Segment total 2,603 2,902 Corporate and unallocated (a) 519 525 Total depreciation and amortization $ 3,122 $ 3,427 (a) Corporate and unallocated operating loss includes amortization of capitalized interest, movement in capitalized indirect costs, expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments reported above, including information technology, treasury, corporate finance, legal, branding and national marketing, and other amounts that are not allocated to our operating segments. Corporate and unallocated depreciation and amortization represents depreciation and amortization related to assets held by our corporate functions that benefit all segments. The following table presents capital expenditures by segment for the periods presented: Three Months Ended December 31, in thousands 2020 2019 Capital Expenditures West $ 1,636 $ 1,484 East 434 452 Southeast 234 516 Corporate and unallocated 649 180 Total capital expenditures $ 2,953 $ 2,632 The following table presents assets by segment as of December 31, 2020 and September 30, 2020: in thousands December 31, 2020 September 30, 2020 Assets West $ 673,605 $ 658,909 East 305,980 267,050 Southeast 312,123 301,827 Corporate and unallocated (a) 692,766 779,694 Total assets $ 1,984,474 $ 2,007,480 (a) Primarily consists of cash and cash equivalents, restricted cash, deferred taxes, capitalized interest and indirect costs, and other items that are not allocated to the segments. |
Discontinued Operations
Discontinued Operations | 3 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations We continually review each of our markets in order to refine our overall investment strategy and to optimize capital and resource allocations in an effort to enhance our financial position and to increase stockholder value. This review entails an evaluation of both external market factors and our position in each market and over time has resulted in the decision to discontinue certain of our homebuilding operations. We have classified the results of operations of our discontinued operations separately in the accompanying condensed consolidated statements of operations for all periods presented. There were no material assets or liabilities related to our discontinued operations as of December 31, 2020 or September 30, 2020. Discontinued operations were not segregated in the condensed consolidated statements of cash flows. Therefore, amounts for certain captions in the condensed consolidated statements of cash flows will not agree with the respective data in the condensed consolidated statements of operations. The results of our discontinued operations in the condensed consolidated statements of operations for the periods presented were as follows: Three Months Ended December 31, in thousands 2020 2019 Total revenue $ — $ — Home construction and land sales expenses (2) 1 Gross profit (loss) 2 (1) General and administrative expenses 52 74 Loss from discontinued operations before income taxes (50) (75) Benefit from income taxes (11) (17) Loss from discontinued operations, net of tax $ (39) $ (58) |
Basis of Presentation and Sum_2
Basis of Presentation and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Basis of Consolidation | Basis of Consolidation The accompanying unaudited condensed consolidated financial statements include the accounts of Beazer Homes USA, Inc. and its consolidated subsidiaries. Intercompany transactions and balances have been eliminated in consolidatio n. Our net income (loss) is equivalent to our comprehensive income (loss), so we have not presented a separate statement of comprehensive income (loss). In the past, we have discontinued homebu ilding operations in various markets. Results from certain of these exited markets are reported as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented (see Note 16 for a further discussion of our discontinued operations). Our fiscal year 2021 began on October 1, 2020 and ends on September 30, 2021. Our fiscal year 2020 began on October 1, 2019 and ended on September 30, 2020. |
Use of Estimates | Use of Estimates The preparation of financial statements in conformity with GAAP requires management to make informed estimates and judgments that affect the amounts reported in the condensed consolidated financial statements and accompanying notes. Accordingly, actual results could differ from these estimates. |
Share Repurchase Program | Share Repurchase ProgramDuring the first quarter of fiscal 2019, the Company's Board of Directors approved a share repurchase program that authorizes the Company to repurchase up to $50.0 million of its outstanding common stock. As part of this program, the Company repurchased common stock during fiscal 2019 and 2020 through open market transactions, 10b5-1 plans, and accelerated share repurchase (ASR) agreements. All shares have been retired upon repurchase. |
Inventory Valuation | Inventory Valuation Inventory assets are assessed for recoverability no less than quarterly in accordance with the policies described in Notes 2 and 5 to the audited consolidated financial statements within our 2020 Annual Report. Homebuilding inventories that are accounted for as held for development (projects in progress) include land and home construction assets grouped together as communities. Homebuilding inventories held for development are stated at cost (including home construction costs, direct overhead costs, capitalized indirect costs, capitalized interest, real estate taxes and allocated lot costs) unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. For communities that have been idled (land held for future development), all applicable carrying costs, such as interest and real estate taxes, are expensed as incurred, and the inventory is stated at cost unless facts and circumstances indicate that the carrying value of the assets may not be recoverable. We record land held for sale at the lower of the carrying value or fair value less costs to sell. |
Revenue Recognition | Revenue Recognition We recognize revenue upon the transfer of promised goods to our customers in an amount that reflects the consideration to which we expect to be entitled by applying the following five-step process specified in Accounting Standards Codification Topic 606. • Identify the contract(s) with a customer • Identify the performance obligations • Determine the transaction price • Allocate the transaction price • Recognize revenue when the performance obligations are met Homebuilding revenue Homebuilding revenue is reported net of any discounts and incentives and is generally recognized when title to and possession of the home are transferred to the buyer at the closing date. The performance obligation to deliver the home is generally satisfied in less than one year from the original contract date. Home sale contract assets consist of cash from home closings held by title companies in escrow for our benefit, typically for less than five days, and are considered accounts receivable. Contract liabilities include customer deposits related to sold but undelivered homes and totaled $22.9 million and $18.9 million as of December 31, 2020 and September 30, 2020, respectively. Of the customer liabilities outstanding as of September 30, 2020, $8.3 million was recognized in revenue during the three months ended December 31, 2020 upon closing of the related homes. Land sales and other revenue Land sales revenue relates to land that does not fit within our homebuilding programs and strategic plans. Land sales typically require cash consideration on the closing date, which is generally when performance obligations are satisfied. We also provide title examinations for our homebuyers in certain markets. Revenues associated with our title operations are recognized as closing services are rendered and title insurance policies are issued, both of which generally occur as each home is closed. |
Recent Accounting Pronouncements | Recent Accounting Pronouncements Fair Value Measurements. On October 1, 2020 we adopted Accounting Standards Update (ASU) No. 2018-13, Fair Value Measurement (Topic 820) - Disclosure Framework (ASU 2018-13). The updated guidance improves the disclosure requirements for fair value measurements. No retrospective adjustments were required. Reference Rate Reform. In March 2020, the FASB issued ASU 2020-04, Facilitation of the Effects of Reference Rate Reform on Financial Reporting (ASU 2020-04). ASU 2020-04 provides companies with optional guidance to ease the potential accounting burden associated with transitioning away from reference rates that are expected to be discontinued. This guidance is effective beginning on March 12, 2020, and we may elect to apply the amendments prospectively through December 31, 2022. The Company is currently evaluating the effect that the new guidance will have on its consolidated financial statements and related disclosures. |
Fair Value Measurements | As of the dates presented, we had assets on our condensed consolidated balance sheets that were required to be measured at fair value on a recurring or non-recurring basis. We use a fair value hierarchy that requires us to maximize the use of observable inputs and minimize the use of unobservable inputs when measuring fair value as follows: • Level 1 – Quoted prices in active markets for identical assets or liabilities; • Level 2 – Inputs other than quoted prices included in Level 1 that are observable either directly or indirectly through corroboration with market data; and • Level 3 – Unobservable inputs that reflect our own estimates about the assumptions market participants would use in pricing the asset or liability. Certain of our assets are required to be recorded at fair value on a recurring basis. The fair value of our deferred compensation plan assets is based on market-corroborated inputs (Level 2). |
Basis of Presentation and Sum_3
Basis of Presentation and Summary of Significant Accounting Policies (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Accounting Policies [Abstract] | |
Disaggregation of Revenue | The following table presents our total revenue disaggregated by revenue stream: Three Months Ended December 31, in thousands 2020 2019 Homebuilding revenue $ 424,229 $ 417,399 Land sales and other revenue 4,310 405 Total revenue (a) $ 428,539 $ 417,804 (a) Please see Note 15 for total revenue disaggregated by reportable segment. |
Supplemental Cash Flow Inform_2
Supplemental Cash Flow Information (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplemental disclosure of non-cash activity | The following table presents supplemental disclosure of non-cash and cash activity as well as a reconciliation of total cash balances between the condensed consolidated balance sheets and condensed consolidated statements of cash flows for the periods presented: Three Months Ended December 31, in thousands 2020 2019 Supplemental disclosure of non-cash activity: Beginning operating lease right-of-use assets (ASC 842 adoption) (a) $ — $ 13,895 Beginning operating lease liabilities (ASC 842 adoption) (a) — 16,028 Increase in operating lease right-of-use assets 1,391 — Increase in operating lease liabilities 1,391 — Supplemental disclosure of cash activity: Interest payments $ 27,048 $ 15,954 Income tax payments — — Tax refunds received 49 303 Reconciliation of cash, cash equivalents, and restricted cash: Cash and cash equivalents $ 244,628 $ 41,277 Restricted cash 17,420 18,759 Total cash, cash equivalents, and restricted cash shown in the statement of cash flows $ 262,048 $ 60,036 (a) On October 1, 2019, we adopted Accounting Standards Update (ASU) No. 2016-02, Leases (ASU 2016-02) and related amendments, collectively codified in ASC 842, Leases (ASC 842). Upon adoption of ASC 842, we recorded net operating lease right-of-use (ROU) assets of $13.9 million and operating lease liabilities of $16.0 million. Existing prepaid rent and accrued rent were recorded as an offset to the gross operating lease ROU assets. |
Investments in Unconsolidated_2
Investments in Unconsolidated Entities (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments in unconsolidated joint ventures, total equity and outstanding borrowings | The following table presents the Company's investment in these unconsolidated entities as well as the total equity and outstanding borrowings of these unconsolidated entities as of December 31, 2020 and September 30, 2020: in thousands December 31, 2020 September 30, 2020 Investment in unconsolidated entities $ 3,928 $ 4,003 Total equity of unconsolidated entities 7,310 7,079 Total outstanding borrowings of unconsolidated entities 10,843 8,807 Equity in income from unconsolidated entity activities included in income from continuing operations is as follows for the periods presented: Three Months Ended December 31, in thousands 2020 2019 Equity in loss of unconsolidated entities $ (75) $ (13) |
Inventory (Tables)
Inventory (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of inventory | The components of our owned inventory are as follows as of December 31, 2020 and September 30, 2020: in thousands December 31, 2020 September 30, 2020 Homes under construction $ 625,296 $ 525,021 Development projects in progress 563,285 589,763 Land held for future development 23,068 28,531 Land held for sale 10,045 12,622 Capitalized interest 119,148 119,659 Model homes 73,148 75,142 Total owned inventory $ 1,413,990 $ 1,350,738 |
Schedule of total owned inventory, by segment | Total owned inventory by reportable segment is presented in the table below as of December 31, 2020 and September 30, 2020: in thousands Projects in Progress (a) Land Held for Future Development Land Held for Sale Total Owned December 31, 2020 West Segment $ 645,137 $ 3,483 $ 1,775 $ 650,395 East Segment 278,258 14,077 3,844 296,179 Southeast Segment 284,216 5,508 4,426 294,150 Corporate and unallocated (b) 173,266 — — 173,266 Total $ 1,380,877 $ 23,068 $ 10,045 $ 1,413,990 September 30, 2020 West Segment $ 627,986 $ 3,483 $ 4,516 $ 635,985 East Segment 241,799 14,077 3,702 259,578 Southeast Segment 266,905 10,971 4,404 282,280 Corporate and unallocated (b) 172,895 — — 172,895 Total $ 1,309,585 $ 28,531 $ 12,622 $ 1,350,738 (a) Projects in progress include homes under construction, development projects in progress, capitalized interest, and model home categories from the preceding table. |
Summary of interests in lot option agreements | The following table provides a summary of our interests in lot option agreements as of December 31, 2020 and September 30, 2020: in thousands Deposits & Remaining As of December 31, 2020 Unconsolidated lot option agreements $ 83,016 $ 493,845 As of September 30, 2020 Unconsolidated lot option agreements $ 75,921 $ 395,133 |
Interest (Tables)
Interest (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Real Estate [Abstract] | |
Real Estate Inventory, Capitalized Interest Costs | The following table presents certain information regarding interest for the periods presented: Three Months Ended December 31, in thousands 2020 2019 Capitalized interest in inventory, beginning of period $ 119,659 $ 136,565 Interest incurred 19,902 21,556 Interest expense not qualified for capitalization and included as other expense (a) (1,600) (1,442) Capitalized interest amortized to home construction and land sales expenses (b) (18,813) (19,669) Capitalized interest in inventory, end of period $ 119,148 $ 137,010 (a) The amount of interest capitalized depends on the qualified inventory balance, which considers the status of the Company's inventory holdings. Qualified inventory balance includes the majority of homes under construction and development projects in progress but excludes land held for future development and land held for sale. (b) Capitalized interest amortized to home construction and land sales expenses varies based on the number of homes closed during the period and land sales, if any, as well as other factors. |
Borrowings (Tables)
Borrowings (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Debt Disclosure [Abstract] | |
Schedule of Long-Term Debt | The Company's debt, net of unamortized debt issuance costs consisted of the following as of December 31, 2020 and September 30, 2020: in thousands Final Maturity Date December 31, 2020 September 30, 2020 Senior Unsecured Term Loan (Term Loan) September 2022 $ 100,000 $ 100,000 6 3/4% Senior Notes (2025 Notes) March 2025 229,555 229,555 5 7/8% Senior Notes (2027 Notes) October 2027 394,000 394,000 7 1/4% Senior Notes (2029 Notes) October 2029 350,000 350,000 Unamortized debt issuance costs (10,483) (10,891) Total Senior Notes, net 1,063,072 1,062,664 Junior Subordinated Notes (net of unamortized accretion of $32,120 and $32,636, respectively) July 2036 68,653 68,137 Revolving Credit Facility February 2023 — — Total debt, net $ 1,131,725 $ 1,130,801 |
Debt Instrument Redemption | For additional redemption features, refer to the table below that summarizes the redemption terms of our Senior Notes: Senior Note Description Issuance Date Maturity Date Redemption Terms 6 3/4% Senior Notes March 2017 March 2025 On or prior to March 15, 2020, we may redeem up to 35% of the aggregate principal amount of the 2025 Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 106.750% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date, provided at least 65% of the aggregate principal amount of the 2025 Notes originally issued remains outstanding immediately after such redemption. Callable at any time prior to March 15, 2020, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after March 15, 2020, callable at a redemption price equal to 105.063% of the principal amount; on or after March 15, 2021, callable at a redemption price equal to 103.375% of the principal amount; on or after March 15, 2022, callable at a redemption price equal to 101.688% of the principal amount; on or after March 15, 2023, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest. 5 7/8% Senior Notes October 2017 October 2027 On or prior to October 15, 2022, we may redeem up to 35% of the aggregate principal amount of the 2027 Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 105.875% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date, provided at least 65% of the aggregate principal amount of the 2027 Notes originally issued remains outstanding immediately after such redemption. Callable at any time prior to October 15, 2022, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2022, callable at a redemption price equal to 102.938% of the principal amount; on or after October 15, 2023, callable at a redemption price equal to 101.958% of the principal amount; on or after October 15, 2024, callable at a redemption price equal to 100.979% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest. 7 1/4% Senior Notes September 2019 October 2029 On or prior to October 15, 2022, we may redeem up to 35% of the aggregate principal amount of the 2029 Notes with the net cash proceeds of certain equity offerings at a redemption price equal to 107.250% of the principal amount, plus accrued and unpaid interest to, but excluding, the redemption date, provided at least 65% of the aggregate principal amount of the 2029 Notes originally issued remains outstanding immediately after such redemption. Callable at any time prior to October 15, 2024, in whole or in part, at a redemption price equal to 100.000% of the principal amount, plus a customary make-whole premium; on or after October 15, 2024, callable at a redemption price equal to 103.625% of the principal amount; on or after October 15, 2025, callable at a redemption price equal to 102.417% of the principal amount; on or after October 15, 2026, callable at a redemption price equal to 101.208% of the principal amount; on or after October 15, 2027, callable at a redemption price equal to 100.000% of the principal amount, plus, in each case, accrued and unpaid interest. |
Operating Leases (Tables)
Operating Leases (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Leases [Abstract] | |
Lease, Cost | At December 31, 2020, weighted-average remaining lease term and discount rate were as follows: Weighted-average remaining lease term 5.1 years Weighted-average discount rate 4.77% |
Lessee, Operating Lease, Liability, Maturity | The following is a maturity analysis of the annual undiscounted cash flows reconciled to the carrying value of the operating lease liabilities as of December 31, 2020: Fiscal Years Ending September 30, in thousands 2021 (a) $ 3,364 2022 4,053 2023 3,254 2024 2,121 2025 1,824 Thereafter 3,000 Total lease payments 17,616 Less: Imputed interest 2,056 Total operating lease liabilities $ 15,560 (a) Remaining lease payments are for the period beginning January 1, 2021 through September 30, 2021 |
Contingencies (Tables)
Contingencies (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Warranty reserves | Changes in warranty reserves are as follows for the periods presented: Three Months Ended December 31, in thousands 2020 2019 Balance at beginning of period $ 13,052 $ 13,388 Accruals for warranties issued (a) 2,254 1,665 Changes in liability related to warranties existing in prior periods 377 67 Payments made (3,067) (2,474) Balance at end of period $ 12,616 $ 12,646 (a) Accruals for warranties issued are a function of the number of home closings in the period, the selling prices of the homes closed, and the rates of accrual per home estimated as a percentage of the selling price of the home. |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets measured on a recurring and non-recurring basis | The following table presents the period-end balances of assets measured at fair value on a recurring basis and the impairment-date fair value of certain assets measured at fair value on a non-recurring basis for each hierarchy level. These balances represent only those assets whose carrying values were adjusted to fair value during the periods presented: in thousands Level 1 Level 2 Level 3 Total As of December 31, 2020 Deferred compensation plan assets (a) $ — $ 2,552 $ — $ 2,552 As of September 30, 2020 Deferred compensation plan assets (a) $ — $ 2,339 $ — $ 2,339 Land held for sale (b) — — 6,240 (c) 6,240 (a) Measured at fair value on a recurring basis. (b) Measured at fair value on a non-recurring basis, including the capitalized interest and indirect costs related to the asset. (c) Amount represents the impairment-date fair value of the land held for sale assets that were impaired during the period indicated. |
Schedule of carrying values and estimated fair values of other financial assets and liabilities | The following table presents the carrying value and estimated fair value of certain other financial liabilities as of December 31, 2020 and September 30, 2020: As of December 31, 2020 As of September 30, 2020 in thousands Carrying Amount (a) Fair Value Carrying Amount (a) Fair Value Senior Notes and Term Loan (b) $ 1,063,072 $ 1,147,058 $ 1,062,664 $ 1,098,117 Junior Subordinated Notes (c) 68,653 68,653 68,137 68,137 Total $ 1,131,725 $ 1,215,711 $ 1,130,801 $ 1,166,254 (a) Carrying amounts are net of unamortized debt issuance costs or accretion. (b) The estimated fair value for our publicly-held Senior Notes and the Term Loan have been determined using quoted market rates (Level 2). (c) Since there is no trading market for our Junior Subordinated Notes, the fair value of these notes is estimated by discounting scheduled cash flows through maturity (Level 3). The discount rate is estimated using market rates currently being offered on loans with similar terms and credit quality. Judgment is required in interpreting market data to develop these estimates of fair value. Accordingly, the estimates presented herein are not necessarily indicative of the amounts that we could realize in a current market exchange. |
Stock-based Compensation (Table
Stock-based Compensation (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock-based compensation expense | Following is a summary of stock-based compensation expense related to stock options and restricted stock awards for the three months ended December 31, 2020 and December 31, 2019, respectively. Three Months Ended December 31, in thousands 2020 2019 Stock-based compensation expense $ 3,511 $ 2,311 |
Schedule of stock options outstanding | Following is a summary of stock option activity for the three months ended December 31, 2020: Three Months Ended December 31, 2020 Shares Weighted Average Outstanding at beginning of period 392,465 $ 15.47 Exercised (116,465) 13.33 Outstanding at end of period 276,000 $ 16.37 Exercisable at end of period 269,498 $ 16.53 Vested or expected to vest in the future 275,783 $ 16.38 |
Schedule of nonvested stock awards activity | Following is a summary of restricted stock activity for the three months ended December 31, 2020: Three Months Ended December 31, 2020 Performance-Based Restricted Shares Time-Based Restricted Shares Total Restricted Shares Beginning of period 796,024 610,130 1,406,154 Granted (a) 164,296 246,550 410,846 Vested (222,165) (277,857) (500,022) End of period 738,155 578,823 1,316,978 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of basic and diluted earnings per share | Following is a summary of the components of basic and diluted income (loss) per share for the periods presented: Three Months Ended December 31, in thousands, except per share data 2020 2019 Numerator: Income from continuing operations $ 12,036 $ 2,804 Loss from discontinued operations, net of tax (39) (58) Net income $ 11,997 $ 2,746 Denominator: Basic weighted-average shares 29,771 29,746 Dilutive effect of restricted stock awards 294 353 Dilutive effect of stock options 21 39 Diluted weighted-average shares (a) 30,086 30,138 Basic income (loss) per share: Continuing operations $ 0.40 $ 0.09 Discontinued operations — — Total $ 0.40 $ 0.09 Diluted income (loss) per share: Continuing operations $ 0.40 $ 0.09 Discontinued operations — — Total $ 0.40 $ 0.09 |
Schedule of Antidilutive Securities Excluded from Computation of Earnings Per Share | Three Months Ended December 31, in thousands 2020 2019 Stock options 242,793 210,509 |
Other Liabilities (Tables)
Other Liabilities (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of other liabilities | Other liabilities include the following as of December 31, 2020 and September 30, 2020: in thousands December 31, 2020 September 30, 2020 Accrued compensations and benefits $ 26,826 $ 50,246 Customer deposits 22,917 18,937 Accrued interest 15,613 23,870 Warranty reserve 12,616 13,052 Litigation accruals 5,066 4,981 Income tax liabilities 722 584 Other 26,504 24,313 Total $ 110,264 $ 135,983 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Segment Reporting [Abstract] | |
Schedule of segment reporting information | The following tables contain our revenue, operating income, and depreciation and amortization by segment for the periods presented: Three Months Ended December 31, in thousands 2020 2019 Revenue West $ 236,880 $ 254,398 East 97,964 78,040 Southeast 93,695 85,366 Total revenue $ 428,539 $ 417,804 Three Months Ended December 31, in thousands 2020 2019 Operating income (loss) West $ 33,303 $ 30,331 East 11,368 5,321 Southeast 10,308 3,156 Segment total 54,979 38,808 Corporate and unallocated (a) (37,291) (34,862) Total operating income $ 17,688 $ 3,946 Three Months Ended December 31, in thousands 2020 2019 Depreciation and amortization West $ 1,537 $ 1,808 East 471 554 Southeast 595 540 Segment total 2,603 2,902 Corporate and unallocated (a) 519 525 Total depreciation and amortization $ 3,122 $ 3,427 (a) Corporate and unallocated operating loss includes amortization of capitalized interest, movement in capitalized indirect costs, expenses related to numerous shared services functions that benefit all segments but are not allocated to the operating segments reported above, including information technology, treasury, corporate finance, legal, branding and national marketing, and other amounts that are not allocated to our operating segments. Corporate and unallocated depreciation and amortization represents depreciation and amortization related to assets held by our corporate functions that benefit all segments. The following table presents capital expenditures by segment for the periods presented: Three Months Ended December 31, in thousands 2020 2019 Capital Expenditures West $ 1,636 $ 1,484 East 434 452 Southeast 234 516 Corporate and unallocated 649 180 Total capital expenditures $ 2,953 $ 2,632 The following table presents assets by segment as of December 31, 2020 and September 30, 2020: in thousands December 31, 2020 September 30, 2020 Assets West $ 673,605 $ 658,909 East 305,980 267,050 Southeast 312,123 301,827 Corporate and unallocated (a) 692,766 779,694 Total assets $ 1,984,474 $ 2,007,480 (a) Primarily consists of cash and cash equivalents, restricted cash, deferred taxes, capitalized interest and indirect costs, and other items that are not allocated to the segments. |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 3 Months Ended |
Dec. 31, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Schedule of Results of Discontinued Operations | The results of our discontinued operations in the condensed consolidated statements of operations for the periods presented were as follows: Three Months Ended December 31, in thousands 2020 2019 Total revenue $ — $ — Home construction and land sales expenses (2) 1 Gross profit (loss) 2 (1) General and administrative expenses 52 74 Loss from discontinued operations before income taxes (50) (75) Benefit from income taxes (11) (17) Loss from discontinued operations, net of tax $ (39) $ (58) |
Description of Business (Detail
Description of Business (Details) | Dec. 31, 2020stateregion |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Number of states in which home building segments operate | state | 13 |
Number of regions in which entity operates | region | 3 |
Basis of Presentation and Sum_4
Basis of Presentation and Summary of Significant Accounting Policies - Share Repurchase Program (Details) - USD ($) | 3 Months Ended | 12 Months Ended | ||
Dec. 31, 2020 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2018 | |
Accounting Policies [Abstract] | ||||
Authorized amount repurchase of common stock | $ 50,000,000 | |||
Share repurchases | $ 3,300,000 | $ 34,600,000 | ||
Completed common stock repurchase (in shares) | 0 | |||
Remaining authorized repurchase amount | $ 12,000,000 |
Basis of Presentation and Sum_5
Basis of Presentation and Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 428,539 | $ 417,804 | |
Customer deposits | 22,917 | $ 18,937 | |
Contract with customer, liability, revenue recognized | 8,300 | ||
Homebuilding revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | 424,229 | 417,399 | |
Land sales and other revenue | |||
Disaggregation of Revenue [Line Items] | |||
Total revenue | $ 4,310 | $ 405 |
Supplemental Cash Flow Inform_3
Supplemental Cash Flow Information - Supplemental Disclosure of Non-cash Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | |||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | Oct. 01, 2019 | |
Cash and Cash Equivalents [Line Items] | ||||
Operating lease right-of-use assets | $ 13,592 | $ 13,103 | ||
Operating lease liabilities | 15,560 | 15,333 | ||
Increase in operating lease right-of-use assets | 1,391 | $ 0 | ||
Increase in operating lease liabilities | 1,391 | 0 | ||
Supplemental disclosure of cash activity: | ||||
Interest payments | 27,048 | 15,954 | ||
Income tax payments | 0 | 0 | ||
Tax refunds received | 49 | 303 | ||
Reconciliation of cash, cash equivalents, and restricted cash: | ||||
Cash and cash equivalents | 244,628 | 41,277 | 327,693 | |
Restricted cash | 17,420 | 18,759 | $ 14,835 | |
Total cash, cash equivalents, and restricted cash shown in the statement of cash flows | 262,048 | 60,036 | ||
Accounting Standards Update 2016-02 | ||||
Cash and Cash Equivalents [Line Items] | ||||
Operating lease right-of-use assets | 0 | 13,895 | $ 13,900 | |
Operating lease liabilities | $ 0 | $ 16,028 | $ 16,000 |
Investments in Unconsolidated_3
Investments in Unconsolidated Entities - Outstanding Borrowings of Unconsolidated Entities and Equity in Income (Loss) (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Schedule of Equity Method Investments [Line Items] | ||||
Total equity of unconsolidated entities | $ 606,062 | $ 593,171 | $ 539,280 | $ 538,754 |
Total outstanding borrowings of unconsolidated entities | 1,131,725 | 1,130,801 | ||
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Investment in unconsolidated entities | 3,928 | 4,003 | ||
Total equity of unconsolidated entities | 7,310 | 7,079 | ||
Total outstanding borrowings of unconsolidated entities | $ 10,843 | $ 8,807 |
Investments in Unconsolidated_4
Investments in Unconsolidated Entities - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2020 | Dec. 31, 2019 | Sep. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |||
Impairment of unconsolidated entity investments | $ 0 | $ 0 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity in loss of unconsolidated entities | (75) | (13) | |
Equity in income of unconsolidated entities | 0 | $ 0 | |
Financial Guarantee | |||
Schedule of Equity Method Investments [Line Items] | |||
Outstanding guarantees | $ 0 | $ 0 |
Inventory - Schedule of Invento
Inventory - Schedule of Inventory (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Inventory Disclosure [Abstract] | ||||
Homes under construction | $ 625,296 | $ 525,021 | ||
Development projects in progress | 563,285 | 589,763 | ||
Land held for future development | 23,068 | 28,531 | ||
Land held for sale | 10,045 | 12,622 | ||
Capitalized interest | 119,148 | 119,659 | $ 137,010 | $ 136,565 |
Model homes | 73,148 | 75,142 | ||
Total owned inventory | $ 1,413,990 | $ 1,350,738 |
Inventory - Narrative (Details)
Inventory - Narrative (Details) | 3 Months Ended | ||
Dec. 31, 2020USD ($)numberOfContracthome | Dec. 31, 2019USD ($) | Sep. 30, 2020USD ($)home | |
Real Estate Properties [Line Items] | |||
Number of substantially completed homes unsold | home | 109 | 133 | |
Total value of substantially completed homes | $ 34,100,000 | $ 42,200,000 | |
Threshold number of homes below a minimum threshold of profitability | home | 10 | ||
Impairment of land held for sale | $ 0 | $ 0 | |
Impairment charges, abandonments | $ 500,000 | $ 0 | |
Number of terminated land contracts under acquisition | numberOfContract | 1 |
Inventory - Total Owned Invento
Inventory - Total Owned Inventory by Segment (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
Segment Reporting Information [Line Items] | ||
Projects in progress | $ 1,380,877 | $ 1,309,585 |
Land held for future development | 23,068 | 28,531 |
Land held for sale | 10,045 | 12,622 |
Total owned inventory | 1,413,990 | 1,350,738 |
Corporate and unallocated | ||
Segment Reporting Information [Line Items] | ||
Projects in progress | 173,266 | 172,895 |
Land held for future development | 0 | 0 |
Land held for sale | 0 | 0 |
Total owned inventory | 173,266 | 172,895 |
West Segment | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Projects in progress | 645,137 | 627,986 |
Land held for future development | 3,483 | 3,483 |
Land held for sale | 1,775 | 4,516 |
Total owned inventory | 650,395 | 635,985 |
East Segment | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Projects in progress | 278,258 | 241,799 |
Land held for future development | 14,077 | 14,077 |
Land held for sale | 3,844 | 3,702 |
Total owned inventory | 296,179 | 259,578 |
Southeast Segment | Operating Segments | ||
Segment Reporting Information [Line Items] | ||
Projects in progress | 284,216 | 266,905 |
Land held for future development | 5,508 | 10,971 |
Land held for sale | 4,426 | 4,404 |
Total owned inventory | $ 294,150 | $ 282,280 |
Inventory - Summary of Interest
Inventory - Summary of Interests in Lot Option Agreements (Details) - Unconsolidated lot option agreements - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
Real Estate Properties [Line Items] | ||
Deposits & Non-refundable Pre-acquisition Costs Incurred | $ 83,016 | $ 75,921 |
Remaining Obligation | $ 493,845 | $ 395,133 |
Interest - Schedule of Capitali
Interest - Schedule of Capitalized Interest (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Real Estate Inventory, Capitalized Interest Costs [Roll Forward] | ||
Capitalized interest in inventory, beginning of period | $ 119,659 | $ 136,565 |
Interest incurred | 19,902 | 21,556 |
Interest expense not qualified for capitalization and included as other expense | (1,600) | (1,442) |
Capitalized interest amortized to home construction and land sales expenses | (18,813) | (19,669) |
Capitalized interest in inventory, end of period | $ 119,148 | $ 137,010 |
Borrowings - Schedule of Long-t
Borrowings - Schedule of Long-term Debt (Details) - USD ($) | Dec. 31, 2020 | Sep. 30, 2020 | Jul. 30, 2016 |
Debt Instrument [Line Items] | |||
Unamortized debt issuance costs | $ (10,483,000) | $ (10,891,000) | |
Total outstanding borrowings of unconsolidated entities | 1,131,725,000 | 1,130,801,000 | |
Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior Unsecured Term Loan (Term Loan) | 100,000,000 | 100,000,000 | |
Unamortized debt issuance costs | (10,483,000) | (10,891,000) | |
Total outstanding borrowings of unconsolidated entities | 1,063,072,000 | 1,062,664,000 | |
Senior Notes | 6 3/4% Senior Notes Maturing March of 2025 | |||
Debt Instrument [Line Items] | |||
Total outstanding borrowings of unconsolidated entities | 229,555,000 | 229,555,000 | |
Senior Notes | 5 7/8% Senior Notes Maturing October 2027 | |||
Debt Instrument [Line Items] | |||
Total outstanding borrowings of unconsolidated entities | 394,000,000 | 394,000,000 | |
Senior Notes | 7 1/4% Senior Notes Maturing October 2029 | |||
Debt Instrument [Line Items] | |||
Total outstanding borrowings of unconsolidated entities | 350,000,000 | 350,000,000 | |
Junior Subordinated Notes | |||
Debt Instrument [Line Items] | |||
Total outstanding borrowings of unconsolidated entities | 68,653,000 | 68,137,000 | |
Stated interest rate on debt instrument | 7.987% | ||
Unamortized accretion | 32,120,000 | 32,636,000 | |
Revolving Credit Facility | |||
Debt Instrument [Line Items] | |||
Revolving Credit Facility | $ 0 | $ 0 | |
Senior Notes | 6 3/4% Senior Notes Maturing March of 2025 | |||
Debt Instrument [Line Items] | |||
Stated interest rate on debt instrument | 6.75% | ||
Senior Notes | 5 7/8% Senior Notes Maturing October 2027 | |||
Debt Instrument [Line Items] | |||
Stated interest rate on debt instrument | 5.88% | ||
Senior Notes | 7 1/4% Senior Notes Maturing October 2029 | |||
Debt Instrument [Line Items] | |||
Stated interest rate on debt instrument | 7.25% |
Borrowings - Narrative (Details
Borrowings - Narrative (Details) | Sep. 09, 2019USD ($) | Jul. 30, 2016 | Dec. 31, 2020USD ($)lender | Oct. 08, 2020USD ($) | Sep. 30, 2020USD ($) | May 31, 2018USD ($) | Jan. 31, 2010USD ($) |
Line of Credit Facility [Abstract] | |||||||
Amount of available borrowings under the secured revolving credit facility | $ 250,000,000 | ||||||
Senior Notes [Abstract] | |||||||
Ownership interest In guarantor subsidiaries | 100.00% | ||||||
Junior Subordinated Notes | |||||||
Unsecured Debt [Abstract] | |||||||
Stated interest rate on debt instrument | 7.987% | ||||||
Junior Subordinated Notes [Abstract] | |||||||
Effective period of debt instrument interest rate | 10 years | ||||||
Face amount modification | $ 75,000,000 | ||||||
Unamortized accretion | $ 32,120,000 | $ 32,636,000 | |||||
Revolving Credit Facility | |||||||
Line of Credit Facility [Abstract] | |||||||
Credit facility borrowing capacity | $ 250,000,000 | ||||||
Number of lenders | lender | 4 | ||||||
Covenant, aggregate amount of other investments | $ 300,000,000 | ||||||
Minimum liquidity covenant, interest coverage ratio | 1 | ||||||
Minimum housing collateral ratio | 1.75 | ||||||
Minimum liquidity, amount | $ 50,000,000 | ||||||
Minimum liquidity, outside of initial requirements, amount | $ 100,000,000 | ||||||
Borrowings outstanding | $ 0 | 0 | |||||
Letters of credit secured using cash collateral | 0 | 0 | |||||
Letter of Credit, Cash Secured | |||||||
Line of Credit Facility [Abstract] | |||||||
Letters of credit secured using cash collateral | 11,700,000 | $ 12,700,000 | |||||
Standby Letters of Credit | Standby Letters for Credit Facility | |||||||
Line of Credit Facility [Abstract] | |||||||
Credit facility borrowing capacity | $ 50,000,000 | ||||||
Letters of credit secured using cash collateral | $ 25,700,000 | ||||||
Standby Letters of Credit | Backstop Standby Letters of Credit | |||||||
Line of Credit Facility [Abstract] | |||||||
Credit facility borrowing capacity | $ 40,000,000 | ||||||
Junior Subordinated Notes | |||||||
Junior Subordinated Notes [Abstract] | |||||||
Weighted average fixed interest rate of debt | 4.25% | ||||||
Senior Notes | Senior Unsecured Term Loans September 2022 | |||||||
Unsecured Debt [Abstract] | |||||||
Aggregate principal amount of debt | $ 100,000,000 | ||||||
Periodic payment | $ 50,000,000 | ||||||
Stated interest rate on debt instrument | 4.875% |
Borrowings - Debt Redemption (D
Borrowings - Debt Redemption (Details) - Senior Notes | 3 Months Ended |
Dec. 31, 2020 | |
6 3/4% Senior Notes Maturing March of 2025 | |
Debt Instrument [Line Items] | |
Stated interest rate on debt instrument | 6.75% |
Percentage of principal amount redeemed | 35.00% |
Redemption price percentage | 106.75% |
Percentage of principal amount outstanding after redemption | 65.00% |
6 3/4% Senior Notes Maturing March of 2025 | Debt Instrument, Redemption, Period One | |
Debt Instrument [Line Items] | |
Redemption price percentage | 100.00% |
6 3/4% Senior Notes Maturing March of 2025 | Debt Instrument, Redemption, Period Two | |
Debt Instrument [Line Items] | |
Redemption price percentage | 105.063% |
6 3/4% Senior Notes Maturing March of 2025 | Debt Instrument, Redemption, Period Three | |
Debt Instrument [Line Items] | |
Redemption price percentage | 103.375% |
6 3/4% Senior Notes Maturing March of 2025 | Debt Instrument, Redemption, Period Four | |
Debt Instrument [Line Items] | |
Redemption price percentage | 101.688% |
6 3/4% Senior Notes Maturing March of 2025 | Debt Instrument, Redemption, Period Five | |
Debt Instrument [Line Items] | |
Redemption price percentage | 100.00% |
5 7/8% Senior Notes Maturing October 2027 | |
Debt Instrument [Line Items] | |
Stated interest rate on debt instrument | 5.88% |
Percentage of principal amount redeemed | 35.00% |
Redemption price percentage | 105.875% |
Percentage of principal amount outstanding after redemption | 65.00% |
5 7/8% Senior Notes Maturing October 2027 | Debt Instrument, Redemption, Period One | |
Debt Instrument [Line Items] | |
Redemption price percentage | 100.00% |
5 7/8% Senior Notes Maturing October 2027 | Debt Instrument, Redemption, Period Two | |
Debt Instrument [Line Items] | |
Redemption price percentage | 102.938% |
5 7/8% Senior Notes Maturing October 2027 | Debt Instrument, Redemption, Period Three | |
Debt Instrument [Line Items] | |
Redemption price percentage | 101.958% |
5 7/8% Senior Notes Maturing October 2027 | Debt Instrument, Redemption, Period Four | |
Debt Instrument [Line Items] | |
Redemption price percentage | 100.979% |
5 7/8% Senior Notes Maturing October 2027 | Debt Instrument, Redemption, Period Five | |
Debt Instrument [Line Items] | |
Redemption price percentage | 100.00% |
7 1/4% Senior Notes Maturing October 2029 | |
Debt Instrument [Line Items] | |
Stated interest rate on debt instrument | 7.25% |
Percentage of principal amount redeemed | 35.00% |
Redemption price percentage | 107.25% |
Percentage of principal amount outstanding after redemption | 65.00% |
7 1/4% Senior Notes Maturing October 2029 | Debt Instrument, Redemption, Period One | |
Debt Instrument [Line Items] | |
Redemption price percentage | 100.00% |
7 1/4% Senior Notes Maturing October 2029 | Debt Instrument, Redemption, Period Two | |
Debt Instrument [Line Items] | |
Redemption price percentage | 103.625% |
7 1/4% Senior Notes Maturing October 2029 | Debt Instrument, Redemption, Period Three | |
Debt Instrument [Line Items] | |
Redemption price percentage | 102.417% |
7 1/4% Senior Notes Maturing October 2029 | Debt Instrument, Redemption, Period Four | |
Debt Instrument [Line Items] | |
Redemption price percentage | 101.208% |
7 1/4% Senior Notes Maturing October 2029 | Debt Instrument, Redemption, Period Five | |
Debt Instrument [Line Items] | |
Redemption price percentage | 100.00% |
Operating Leases - Additional I
Operating Leases - Additional Information (Details) $ in Millions | 3 Months Ended |
Dec. 31, 2020USD ($) | |
Leases [Abstract] | |
Operating lease expense | $ 1.1 |
Operating lease payments | $ 1.4 |
Operating Leases - Weighted-Ave
Operating Leases - Weighted-Average Remaining Lease Term and Discount Rate (Details) | Dec. 31, 2020 |
Leases [Abstract] | |
Weighted-average remaining lease term | 5 years 1 month 6 days |
Weighted-average discount rate | 4.77% |
Operating Leases - Maturity Ana
Operating Leases - Maturity Analysis of the Annual Undiscounted Cash Flows (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
Lessee, Operating Lease, Liability, Payment, Due [Abstract] | ||
2020 | $ 3,364 | |
2022 | 4,053 | |
2023 | 3,254 | |
2024 | 2,121 | |
2025 | 1,824 | |
Thereafter | 3,000 | |
Total lease payments | 17,616 | |
Less: Imputed interest | 2,056 | |
Total operating lease liabilities | $ 15,560 | $ 15,333 |
Contingencies - Warranty (Detai
Contingencies - Warranty (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Commitments and Contingencies Disclosure [Abstract] | ||
Standard product warranty length, minimum | 1 year | |
Standard product warranty length, maximum | 2 years | |
Limited product warranty length (up to) | 10 years | |
Movement in Standard Product Warranty Accrual [Roll Forward] | ||
Balance at beginning of period | $ 13,052 | $ 13,388 |
Accruals for warranties issued | 2,254 | 1,665 |
Changes in liability related to warranties existing in prior periods | 377 | 67 |
Payments made | (3,067) | (2,474) |
Balance at end of period | $ 12,616 | $ 12,646 |
Contingencies - Litigation and
Contingencies - Litigation and Other Matters (Details) $ in Millions | 3 Months Ended | ||
Mar. 31, 2019Community | Dec. 31, 2020USD ($) | Sep. 30, 2020USD ($) | |
Legal Reserve | |||
Loss Contingencies [Line Items] | |||
Accrued amounts for litigation and other contingent liabilities | $ 5.1 | $ 5 | |
Performance Bonds | |||
Loss Contingencies [Line Items] | |||
Letters of credit secured using cash collateral | 37.4 | ||
Outstanding performance bonds | $ 257.3 | ||
CALIFORNIA | |||
Loss Contingencies [Line Items] | |||
Number of communities | Community | 15 |
Fair Value Measurements - Narra
Fair Value Measurements - Narrative (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Fair Value Disclosures [Abstract] | ||
Impairment of land held for sale | $ 0 | $ 0 |
Impairment of projects in process | $ 0 | $ 0 |
Fair Value Measurements - Fair
Fair Value Measurements - Fair Value Assets Measured on a Non-recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
Fair Value, Measurements, Recurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets | $ 2,552 | $ 2,339 |
Fair Value, Measurements, Recurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets | 0 | 0 |
Fair Value, Measurements, Recurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets | 2,552 | 2,339 |
Fair Value, Measurements, Recurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Deferred compensation plan assets | $ 0 | 0 |
Fair Value, Measurements, Nonrecurring | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Land held for sale | 6,240 | |
Fair Value, Measurements, Nonrecurring | Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Land held for sale | 0 | |
Fair Value, Measurements, Nonrecurring | Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Land held for sale | 0 | |
Fair Value, Measurements, Nonrecurring | Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Land held for sale | $ 6,240 |
Fair Value Measurements - Carry
Fair Value Measurements - Carrying Values and Estimated Fair Values of Other Financial Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes payable | $ 1,131,725 | $ 1,130,801 |
Carrying Amount | Senior Notes and Term Loan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes payable | 1,063,072 | 1,062,664 |
Carrying Amount | Junior Subordinated Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes payable | 68,653 | 68,137 |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes payable | 1,215,711 | 1,166,254 |
Fair Value | Senior Notes and Term Loan | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes payable | 1,147,058 | 1,098,117 |
Fair Value | Junior Subordinated Notes | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Notes payable | $ 68,653 | $ 68,137 |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Tax Disclosure [Abstract] | ||
Expense (benefit) from income taxes | $ 4,125 | $ (211) |
Tax credit | $ 700 |
Stock-based Compensation - Summ
Stock-based Compensation - Summary of Stock-Based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Share-based Payment Arrangement [Abstract] | ||
Stock-based compensation expense | $ 3,511 | $ 2,311 |
Stock-based Compensation - Stoc
Stock-based Compensation - Stock Options Outstanding (Details) - Stock Options | 3 Months Ended |
Dec. 31, 2020$ / sharesshares | |
Shares | |
Outstanding at beginning of period (shares) | shares | 392,465 |
Exercised (shares) | shares | (116,465) |
Outstanding at end of period (shares) | shares | 276,000 |
Exercisable at end of period (shares) | shares | 269,498 |
Vested or expected to vest in the future (shares) | shares | 275,783 |
Weighted Average Exercise Price | |
Outstanding at beginning of period (in dollars per share) | $ / shares | $ 15.47 |
Exercised (in dollars per share) | $ / shares | 13.33 |
Outstanding at end of period (in dollars per share) | $ / shares | 16.37 |
Exercisable at end of period (in dollars per share) | $ / shares | 16.53 |
Vested or expected to vest in the future (in dollars per share) | $ / shares | $ 16.38 |
Stock-based Compensation - Narr
Stock-based Compensation - Narrative (Details) - USD ($) $ in Thousands | 1 Months Ended | 3 Months Ended | |
Nov. 30, 2019 | Dec. 31, 2020 | Sep. 30, 2020 | |
Stock Options | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Unrecognized compensation costs related to non-vested stock options award | $ 100 | $ 100 | |
Weighted average period to recognize remaining cost | 7 months 28 days | ||
Performance-Based Restricted Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting period | 3 years | ||
Performance based restricted stock settled in cash payment (in shares) | 60,930 | ||
Nonvested Stock Awards | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Weighted average period to recognize remaining cost | 1 year 11 months 1 day | ||
Unrecognized compensation costs related to non-vested stock awards | $ 12,500 | $ 9,000 |
Stock-based Compensation - Rest
Stock-based Compensation - Restricted Stock Awards (Details) | 3 Months Ended |
Dec. 31, 2020shares | |
Restricted Stock | |
Shares | |
Beginning of period (in shares) | 1,406,154 |
Granted (in shares) | 410,846 |
Vested (in shares) | (500,022) |
End of period (in shares) | 1,316,978 |
Performance-Based Restricted Stock Awards | |
Shares | |
Beginning of period (in shares) | 796,024 |
Granted (in shares) | 164,296 |
Vested (in shares) | (222,165) |
End of period (in shares) | 738,155 |
Time Based Restricted Stock Awards | |
Shares | |
Beginning of period (in shares) | 610,130 |
Granted (in shares) | 246,550 |
Vested (in shares) | (277,857) |
End of period (in shares) | 578,823 |
Earnings Per Share - Schedule o
Earnings Per Share - Schedule of Earnings Per Share. Basic and Dilutive (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Numerator: | ||
Income from continuing operations | $ 12,036 | $ 2,804 |
Loss from discontinued operations, net of tax | (39) | (58) |
Net income | $ 11,997 | $ 2,746 |
Denominator: | ||
Basic weighted-average shares (in shares) | 29,771 | 29,746 |
Dilutive effect of restricted stock awards (in shares) | 294 | 353 |
Dilutive effect of stock options (in shares) | 21 | 39 |
Dilutive weighted-average shares (in shares) | 30,086 | 30,138 |
Basic income (loss) per share: | ||
Continuing Operations (in dollars per share) | $ 0.40 | $ 0.09 |
Discontinued operations (in dollars per share) | 0 | 0 |
Total (in dollars per share) | 0.40 | 0.09 |
Diluted income (loss) per share: | ||
Continuing operations (in dollars per share) | 0.40 | 0.09 |
Discontinued operations (in dollars per share) | 0 | 0 |
Total (in dollars per share) | $ 0.40 | $ 0.09 |
Earnings Per Share - Antidiluti
Earnings Per Share - Antidilutive Securities (Details) - shares shares in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Earnings Per Share [Abstract] | ||
Stock options (in shares) | 242,793 | 210,509 |
Other Liabilities (Details)
Other Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 |
Other Liabilities Disclosure [Abstract] | ||||
Accrued compensations and benefits | $ 26,826 | $ 50,246 | ||
Customer deposits | 22,917 | 18,937 | ||
Accrued interest | 15,613 | 23,870 | ||
Warranty reserve | 12,616 | 13,052 | $ 12,646 | $ 13,388 |
Litigation accruals | 5,066 | 4,981 | ||
Income tax liabilities | 722 | 584 | ||
Other | 26,504 | 24,313 | ||
Total | $ 110,264 | $ 135,983 |
Segment Information (Details)
Segment Information (Details) $ in Thousands | 3 Months Ended | ||
Dec. 31, 2020USD ($)statesegmentregion | Dec. 31, 2019USD ($) | Sep. 30, 2020USD ($) | |
Segment Reporting [Abstract] | |||
Number of states in which home building segments operate | state | 13 | ||
Number of regions in which entity operates | region | 3 | ||
Number of reportable segments | segment | 3 | ||
Segment Reporting Information [Line Items] | |||
Revenue | $ 428,539 | $ 417,804 | |
Operating income | 17,688 | 3,946 | |
Depreciation and amortization | 3,122 | 3,427 | |
Capital expenditures | 2,953 | 2,632 | |
Assets | 1,984,474 | $ 2,007,480 | |
Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Operating income | 54,979 | 38,808 | |
Depreciation and amortization | 2,603 | 2,902 | |
Corporate and unallocated | |||
Segment Reporting Information [Line Items] | |||
Operating income | (37,291) | (34,862) | |
Depreciation and amortization | 519 | 525 | |
Capital expenditures | 649 | 180 | |
Assets | 692,766 | 779,694 | |
West Segment | |||
Segment Reporting Information [Line Items] | |||
Revenue | 236,880 | 254,398 | |
West Segment | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Operating income | 33,303 | 30,331 | |
Depreciation and amortization | 1,537 | 1,808 | |
Capital expenditures | 1,636 | 1,484 | |
Assets | 673,605 | 658,909 | |
East Segment | |||
Segment Reporting Information [Line Items] | |||
Revenue | 97,964 | 78,040 | |
East Segment | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Operating income | 11,368 | 5,321 | |
Depreciation and amortization | 471 | 554 | |
Capital expenditures | 434 | 452 | |
Assets | 305,980 | 267,050 | |
Southeast Segment | |||
Segment Reporting Information [Line Items] | |||
Revenue | 93,695 | 85,366 | |
Southeast Segment | Operating Segments | |||
Segment Reporting Information [Line Items] | |||
Operating income | 10,308 | 3,156 | |
Depreciation and amortization | 595 | 540 | |
Capital expenditures | 234 | $ 516 | |
Assets | $ 312,123 | $ 301,827 |
Discontinued Operations - Resul
Discontinued Operations - Results of Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Dec. 31, 2020 | Dec. 31, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Loss from discontinued operations, net of tax | $ (39) | $ (58) |
Discontinued Operations | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Total revenue | 0 | 0 |
Home construction and land sales expenses | (2) | 1 |
Gross profit (loss) | 2 | (1) |
General and administrative expenses | 52 | 74 |
Loss from discontinued operations before income taxes | (50) | (75) |
Benefit from income taxes | (11) | (17) |
Loss from discontinued operations, net of tax | $ (39) | $ (58) |