Exhibit 99.1
| PRESS RELEASE |
| For Immediate Release |
Beazer Homes Reports Record Second Fiscal Quarter EPS of $3.52, up 24%
Company Raises EPS Outlook for Fiscal Year 2004
ATLANTA, April 22, 2004 — Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced results for the quarter and six months ended March 31, 2004, reporting record earnings for the quarter. Highlights of the quarter, compared to the same period of the prior year, are as follows:
Quarter Ended March 31, 2004
• Record diluted EPS: $3.52 (up 24% vs. $2.83 in prior year)
• Home closings: 3,684 (up 12%)
• Total revenues: $876.6 million (up 32%)
• Gross Profit: $177.6 million (up 29%)
• Operating Income: $77.8 million (up 27%)
• Net income: $48.9 million (up 29%)
• New orders: 5,032 (up 10%)
• Backlog at 3/31/04: 8,470 homes (up 14%), sales value $2.04 billion (up 37%)
• Active Subdivisions at 3/31/04: 508 (up 6%)
Record Earnings for March Quarter
Ian J. McCarthy, President and Chief Executive officer, said, “We are very pleased to announce record financial results for our second quarter of fiscal 2004. Our March quarter home closings and revenues increased 12% and 32% respectively, and new orders were up 10%, indicating continued strength and favorable conditions in the housing industry and Beazer Homes’ strong position in the market. This was accompanied by record March quarter net income, which was up 29% from the prior year, illustrating our ongoing commitment to achieving profitable growth by leveraging our size, scale and geographic reach, and continuing to execute specific growth and profitability initiatives.”
“Beazer Homes’ backlog now stands at 8,470 homes with a sales value of $2.04 billion, up 14% and 37%, respectively, from the backlog homes and sales value at March 31, 2003. This sizable backlog increase provides excellent visibility as we move into the second half of fiscal 2004,” added McCarthy.
Strong Financial Position Continues in March Quarter
“Beazer Homes’ financial position remained strong during the second fiscal quarter,” said James O’Leary, Executive Vice President and Chief Financial Officer. “At March 31, 2004, debt to total capitalization and net debt to total capitalization stood at 46% and 44%, respectively, with a cash position of $89.6 million. Our financial results reflect our commitment to improved profitability and focused organic growth within our diverse geographic footprint.”
During the second fiscal quarter of 2004, the Company increased its home sales gross margin while total gross and operating profit margins declined slightly compared to the same period a year ago. While the Company continued to realize benefits from the execution of its profit improvement initiatives, such gains were offset by increased marketing expenses of approximately $3.5 million associated with the Company’s branding initiative and ongoing warranty costs of approximately $11.4 million associated with construction defect claims from water intrusion at one of its Midwest divisions.
Total inventory of $2.27 billion at March 31, 2004 includes $238.1 million, net of cash deposits, of consolidated inventory not owned, with a corresponding balance of obligations related to consolidated inventory not owned, reflecting the full application of FIN 46R.
Beazer Homes Targets EPS $15.75 – $16.00 in Fiscal 2004
“Our performance for the six months ended March 31, 2004, combined with our significant level of existing backlog and our expectations of continued strength in the housing market provide us confidence in our future growth opportunities,” said McCarthy. “In addition, we expect continued execution on our strategic initiatives that leverage our national brand, capitalize on our broad geographic profile through focused product expansion and price-point diversification, and also drive best practices to achieve optimal efficiencies, will place us in a strong position for continued growth. Absent any unanticipated adverse changes, we are raising our outlook for diluted earnings per share to be in the range of $15.75 – $16.00 in fiscal 2004, representing approximately 25% growth over fiscal 2003.”
Beazer Homes USA, Inc., headquartered in Atlanta is one of the country’s ten largest single-family homebuilders with operations in Arizona, California, Colorado, Delaware, Florida, Georgia, Indiana, Kentucky, Maryland, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Texas and Virginia. Beazer Homes also provides mortgage origination and title services to its homebuyers.
Forward-Looking Statements
Certain statements in this press release are “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements involve known and unknown risks, uncertainties and other factors that may cause actual results to differ materially. Such risks, uncertainties and other factors include, but are not limited to changes in general economic conditions, fluctuations in interest rates, increases in raw materials and labor costs, levels of competition, potential liability as a result of construction defect, product liability and warranty claims, the possibility that the Company’s improvement plan for the Midwest will not achieve desired results, and other factors described in the Company’s Form S-4/A filed with the Securities and Exchange Commission on April 9, 2004 and Annual Report and Form 10-K for the year ended September 30, 2003.
Contact: | Leslie H. Kratcoski |
| Director, Investor Relations |
| (770) 829-3764 |
| lkratcos@beazer.com` |
-Tables Follow-
BEAZER HOMES USA, INC.
CONSOLIDATED OPERATING AND FINANCIAL DATA
(Dollars in thousands, except per share amounts)
FINANCIAL DATA
|
| Quarter Ended |
| Six Months Ended |
| ||||||||
|
| 2004 |
| 2003 |
| 2004 |
| 2003 |
| ||||
INCOME STATEMENT |
|
|
|
|
|
|
|
|
| ||||
Revenues |
| $ | 876,581 |
| $ | 665,567 |
| $ | 1,686,689 |
| $ | 1,365,727 |
|
Costs and expenses: |
|
|
|
|
|
|
|
|
| ||||
Home construction and land sales |
| 699,020 |
| 527,733 |
| 1,343,969 |
| 1,091,450 |
| ||||
Selling, general and administrative expense |
| 99,717 |
| 76,347 |
| 189,224 |
| 153,724 |
| ||||
Operating income |
| 77,844 |
| 61,487 |
| 153,496 |
| 120,553 |
| ||||
Other income |
| 2,250 |
| 1,277 |
| 3,952 |
| 3,236 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Income before income taxes |
| 80,094 |
| 62,764 |
| 157,448 |
| 123,789 |
| ||||
Income taxes |
| 31,236 |
| 24,792 |
| 61,404 |
| 48,897 |
| ||||
Net income |
| $ | 48,858 |
| $ | 37,972 |
| $ | 96,044 |
| $ | 74,892 |
|
|
|
|
|
|
|
|
|
|
| ||||
Net income per common share: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| $ | 3.66 |
| $ | 2.96 |
| $ | 7.22 |
| $ | 5.85 |
|
Diluted |
| $ | 3.52 |
| $ | 2.83 |
| $ | 6.94 |
| $ | 5.59 |
|
|
|
|
|
|
|
|
|
|
| ||||
Weighted average shares outstanding, in thousands: |
|
|
|
|
|
|
|
|
| ||||
Basic |
| 13,331 |
| 12,815 |
| 13,306 |
| 12,813 |
| ||||
Diluted |
| 13,865 |
| 13,403 |
| 13,846 |
| 13,403 |
| ||||
|
|
|
|
|
|
|
|
|
| ||||
Interest incurred |
| $ | 18,532 |
| $ | 16,916 |
| $ | 35,403 |
| $ | 33,498 |
|
Interest amortized to cost of sales |
| $ | 15,187 |
| $ | 12,200 |
| $ | 28,874 |
| $ | 24,100 |
|
Depreciation and amortization |
| $ | 4,021 |
| $ | 2,905 |
| $ | 8,035 |
| $ | 5,684 |
|
|
|
|
|
|
|
|
|
|
| ||||
SELECTED BALANCE SHEET DATA |
|
|
|
|
|
|
|
|
| ||||
|
| March 31, |
|
|
|
|
| ||||||
|
| 2004 |
| 2003 |
|
|
|
|
| ||||
Cash |
| $ | 89,559 |
| $ | 18,818 |
|
|
|
|
| ||
Inventory |
| 2,273,855 |
| 1,541,815 |
|
|
|
|
| ||||
Total assets |
| 2,764,900 |
| 1,953,434 |
|
|
|
|
| ||||
Total debt |
| 948,979 |
| 739,735 |
|
|
|
|
| ||||
Shareholders’ equity |
| 1,094,032 |
| 870,958 |
|
|
|
|
|
OPERATING DATA
|
| Quarter Ended |
| Six Months Ended |
| ||||||
|
| 2004 |
| 2003 |
| 2004 |
| 2003 |
| ||
SELECTED OPERATING DATA |
|
|
|
|
|
|
|
|
| ||
Closings: |
|
|
|
|
|
|
|
|
| ||
Southeast region |
| 1,197 |
| 1,093 |
| 2,454 |
| 2,186 |
| ||
West region |
| 1,404 |
| 1,095 |
| 2,618 |
| 2,135 |
| ||
Central region |
| 208 |
| 272 |
| 448 |
| 538 |
| ||
Mid-Atlantic region |
| 367 |
| 233 |
| 685 |
| 528 |
| ||
Midwest region |
| 508 |
| 604 |
| 1,087 |
| 1,392 |
| ||
Total closings |
| 3,684 |
| 3,297 |
| 7,292 |
| 6,779 |
| ||
New orders, net of cancellations: |
|
|
|
|
|
|
|
|
| ||
Southeast region |
| 1,636 |
| 1,628 |
| 2,679 |
| 2,643 |
| ||
West region |
| 1,885 |
| 1,277 |
| 3,339 |
| 2,216 |
| ||
Central region |
| 351 |
| 296 |
| 536 |
| 528 |
| ||
Mid-Atlantic region |
| 403 |
| 496 |
| 719 |
| 948 |
| ||
Midwest region |
| 757 |
| 882 |
| 1,063 |
| 1,385 |
| ||
Total new orders |
| 5,032 |
| 4,579 |
| 8,336 |
| 7,720 |
| ||
Backlog units at end of period: |
|
|
|
|
|
|
|
|
| ||
Southeast region |
| 2,546 |
| 2,324 |
|
|
|
|
| ||
West region |
| 3,008 |
| 1,914 |
|
|
|
|
| ||
Central region |
| 484 |
| 497 |
|
|
|
|
| ||
Mid-Atlantic region |
| 1,151 |
| 1,120 |
|
|
|
|
| ||
Midwest region |
| 1,281 |
| 1,605 |
|
|
|
|
| ||
Total backlog units |
| 8,470 |
| 7,460 |
|
|
|
|
| ||
Dollar value of backlog at end of period |
| $ | 2,036,493 |
| $ | 1,485,401 |
|
|
|
|
|
Active subdivisions: |
|
|
|
|
|
|
|
|
| ||
Southeast region |
| 184 |
| 186 |
|
|
|
|
| ||
West region |
| 98 |
| 89 |
|
|
|
|
| ||
Central region |
| 44 |
| 33 |
|
|
|
|
| ||
Mid-Atlantic region |
| 51 |
| 39 |
|
|
|
|
| ||
Midwest region |
| 131 |
| 131 |
|
|
|
|
| ||
Total active subdivisions |
| 508 |
| 478 |
|
|
|
|
| ||
|
| Quarter Ended |
| Six Months Ended |
| ||||||||
|
| 2004 |
| 2003 |
| 2004 |
| 2003 |
| ||||
|
|
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|
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|
|
|
|
| ||||
SUPPLEMENTAL FINANCIAL DATA: |
|
|
|
|
|
|
|
|
| ||||
Revenues |
|
|
|
|
|
|
|
|
| ||||
Home sales |
| $ | 853,638 |
| $ | 655,614 |
| $ | 1,646,935 |
| $ | 1,344,384 |
|
Land and lot sales |
| 13,831 |
| 842 |
| 21,566 |
| 3,337 |
| ||||
Mortgage origination revenue |
| 12,294 |
| 12,926 |
| 24,440 |
| 25,410 |
| ||||
Intercompany elimination - mortgage |
| (3,182 | ) | (3,815 | ) | (6,252 | ) | (7,404 | ) | ||||
Total revenues |
| $ | 876,581 |
| $ | 665,567 |
| $ | 1,686,689 |
| $ | 1,365,727 |
|
Cost of home construction and land sales |
|
|
|
|
|
|
|
|
| ||||
Home sales |
| $ | 690,210 |
| $ | 530,841 |
| $ | 1,330,327 |
| $ | 1,096,205 |
|
Land and lot sales |
| 11,992 |
| 707 |
| 19,894 |
| 2,649 |
| ||||
Intercompany elimination - mortgage |
| (3,182 | ) | (3,815 | ) | (6,252 | ) | (7,404 | ) | ||||
Total costs of home construction and land sales |
| $ | 699,020 |
| $ | 527,733 |
| $ | 1,343,969 |
| $ | 1,091,450 |
|
Selling, general and administrative |
|
|
|
|
|
|
|
|
| ||||
Homebuilding operations |
| $ | 91,994 |
| $ | 69,330 |
| $ | 174,107 |
| $ | 139,846 |
|
Mortgage origination operations |
| 7,723 |
| 7,017 |
| 15,117 |
| 13,878 |
| ||||
Total selling, general and administrative |
| $ | 99,717 |
| $ | 76,347 |
| $ | 189,224 |
| $ | 153,724 |
|