Beazer Homes Reports Strong Third Quarter Fiscal 2021 Results

ATLANTA–()–Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three and nine months ended June 30, 2021.

“We had a very successful third quarter, driven by strong operational execution and continued strength in the housing market,” said Allan P. Merrill, the company’s Chairman and Chief Executive Officer. “We generated significant gains in operating margin and adjusted EBITDA, leading to quarterly net income that was more than double the same period last year. At the same time, we grew our total active lot position while continuing to reduce leverage.”

Commenting on fiscal 2021 full-year expectations, Mr. Merrill said, “With our outstanding performance in the third quarter and our confidence in fourth quarter results, we now expect fiscal 2021 earnings per share to be above $3.25.”

Looking at fiscal 2022, Mr. Merrill concluded, “We are positioned to generate double-digit growth in earnings per share for shareholders while expanding our ESG activities to create durable value for all of our stakeholders.”

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

  • Net income from continuing operations of $37.1 million, or $1.22 per diluted share, compared to net income from continuing operations of $15.3 million, or $0.51 per diluted share, in fiscal third quarter 2020
  • Adjusted EBITDA of $78.8 million, up 45.9%
  • Homebuilding revenue of $566.9 million, up 6.5% on a 5.5% increase in average selling price to $411.4 thousand and a 0.9% increase in home closings to 1,378
  • Homebuilding gross margin was 20.2%, up 320 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 24.2%, up 300 basis points
  • SG&A as a percentage of total revenue was 11.1%, down 60 basis points year-over-year
  • Net new orders of 1,199, down 12.6% on a 18.6% increase in orders/community/month to 3.2 and a 26.3% decrease in average community count to 123
  • Dollar value of backlog of $1,354.6 million, up 53.1%
  • Unrestricted cash at quarter end was $358.3 million; total liquidity was $608.3 million

The following provides additional details on the Company’s performance during the fiscal third quarter 2021:

Profitability. Net income from continuing operations was $37.1 million, generating diluted earnings per share of $1.22. Third quarter adjusted EBITDA of $78.8 million was up $24.8 million year-over-year. The increase in profitability was primarily driven by higher revenue, homebuilding gross margin and improved SG&A leverage.

Orders. Net new orders for the third quarter decreased to 1,199, down 12.6% from the prior year. The decrease in net new orders was driven by a 26.3% decrease in average community count to 123, partially offset by a 18.6% increase in sales pace to 3.2 orders per community per month, up from 2.7 in the previous year. In a number of communities, we proactively limited sales pace to align with the pace of production, optimize margins and ensure a positive customer experience. The cancellation rate for the quarter was 10.9%, an improvement of 1,020 basis points year-over-year.

Backlog. The dollar value of homes in backlog as of June 30, 2021 increased 53.1% to $1,354.6 million, representing 3,124 homes, compared to $884.9 million, representing 2,237 homes, at the same time last year. The average selling price of homes in backlog was $433.6 thousand, up 9.6% year-over-year.

Homebuilding Revenue. Third quarter homebuilding revenue was $566.9 million, up 6.5% year-over-year. The increase in homebuilding revenue was driven by a 5.5% increase in the average selling price to $411.4 thousand and a 0.9% increase in home closings to 1,378 homes.

Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 24.2% for the third quarter, up 300 basis points year-over-year, driven primarily by lower sales incentives and pricing increases. Gross margin was up across each of our geographic segments.

SG&A Expenses. Selling, general and administrative expenses as a percentage of total revenue was 11.1% for the quarter, down 60 basis points year-over-year as a result of the Company’s continued focus on overhead cost management while driving revenue growth.

Liquidity. At the close of the third quarter, the Company had approximately $608.3 million of available liquidity, including $358.3 million of unrestricted cash and a fully undrawn revolving credit facility capacity of $250.0 million.

Debt Repurchases. The Company repurchased $14.0 million of its outstanding 5.875% unsecured Senior Notes due October 2027 at an average price of $106.545 per $100 principal amount.

Commitment to Net Zero Energy Ready

Reflecting our continued leadership and commitment to energy efficiency, during the quarter, Brian Shanks, Beazer’s Manager of National Accounts and Governmental Affairs, was named to the International Code Council (ICC) Residential Energy Code Consensus Committee created to lead development of future energy codes. The new committee will begin work this summer on developing the 2024 International Energy Conservation Code (IECC).

In December 2020, Beazer became the first national builder to publicly commit to ensuring that by the end of 2025 every home we build will be Net Zero Energy Ready. Net Zero Energy Ready means that each home will have a gross HERS® index score (before any benefit of renewable energy production) of 45 or less, and homeowners will be able to achieve net zero energy consumption by attaching a properly sized renewable energy system.

Summary results for the three and nine months ended June 30, 2021 are as follows:

 

Three Months Ended June 30,

 

2021

 

2020

 

Change*

New home orders, net of cancellations

 

1,199

 

 

 

1,372

 

 

 

(12.6

)%

Orders per community per month

 

3.2

 

 

 

2.7

 

 

 

18.6

%

Average active community count

 

123

 

 

 

167

 

 

 

(26.3

)%

Actual community count at quarter-end

 

120

 

 

 

164

 

 

 

(26.8

)%

Cancellation rates

 

10.9

%

 

 

21.1

%

 

 

(1,020

) bps

 

 

 

 

 

 

Total home closings

 

1,378

 

 

 

1,366

 

 

 

0.9

%

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

$

411.4

 

 

$

389.8

 

 

 

5.5

%

Homebuilding revenue (in millions)

$

566.9

 

 

$

532.5

 

 

 

6.5

%

Homebuilding gross margin

 

20.2

%

 

 

17.0

%

 

 

320

  bps

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

 

20.3

%

 

 

17.1

%

 

 

320

  bps

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

 

24.2

%

 

 

21.2

%

 

 

300

  bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

47.9

 

 

$

20.3

 

 

$

27.7

 

Expense from income taxes (in millions)

$

10.8

 

 

$

5.0

 

 

$

5.8

 

Income from continuing operations, net of tax (in millions)

$

37.1

 

 

$

15.3

 

 

$

21.9

 

Basic income per share from continuing operations

$

1.24

 

 

$

0.51

 

 

$

0.73

 

Diluted income per share from continuing operations

$

1.22

 

 

$

0.51

 

 

$

0.71

 

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

47.9

 

 

$

20.3

 

 

$

27.7

 

Loss on debt extinguishment (in millions)

$

(1.1

)

 

$

 

 

$

(1.1

)

Inventory impairments and abandonments (in millions)

$

(0.2

)

 

$

(2.3

)

 

$

2.0

 

Restructuring and severance charges

$

 

 

$

(1.4

)

 

$

1.4

 

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

$

49.2

 

 

$

24.0

 

 

$

25.2

 

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

$

38.0

 

 

$

17.6

 

 

$

20.4

 

 

 

 

 

 

 

Net income

$

37.1

 

 

$

15.2

 

 

$

21.9

 

 

 

 

 

 

 

Land and land development spending (in millions)

$

143.0

 

 

$

55.7

 

 

$

87.3

 

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

78.8

 

 

$

54.0

 

 

$

24.8

 

LTM Adjusted EBITDA (in millions)

$

263.7

 

 

$

209.4

 

 

$

54.4

 

*

Change and totals are calculated using unrounded numbers.

(a)

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

(b)

For the three months ended June 30, 2021, loss on debt extinguishment and inventory impairments and abandonments were tax-effected at the effective tax rate of 24.0%. For the three months ended June 30, 2020, inventory impairments and abandonments and restructuring and severance charges were tax-effected at the effective tax rate of 26.4%.

“LTM” indicates amounts for the trailing 12 months.

 

Nine Months Ended June 30,

 

2021

 

2020

 

Change*

New home orders, net of cancellations

 

4,495

 

 

 

4,284

 

 

 

4.9

%

LTM orders per community per month

 

4.0

 

 

 

2.9

 

 

 

37.9

%

Cancellation rates

 

11.0

%

 

 

17.3

%

 

$

(630

) bps

 

 

 

 

 

 

Total home closings

 

3,880

 

 

 

3,755

 

 

 

3.3

%

ASP from closings (in thousands)

$

396.5

 

 

$

382.9

 

 

 

3.6

%

Homebuilding revenue (in millions)

$

1,538.6

 

 

$

1,437.9

 

 

 

7.0

%

Homebuilding gross margin

 

18.7

%

 

 

16.1

%

 

 

260

  bps

Homebuilding gross margin, excluding I&A

 

18.7

%

 

 

16.2

%

 

 

250

  bps

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

 

22.9

%

 

 

20.7

%

 

 

220

  bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

96.5

 

 

$

37.6

 

 

$

58.8

 

Expense from income taxes (in millions)

$

22.6

 

 

$

8.9

 

 

$

13.7

 

Income from continuing operations, net of tax (in millions)

$

73.8

 

 

$

28.7

 

 

$

45.1

 

Basic income per share from continuing operations

$

2.47

 

 

$

0.96

 

 

$

1.51

 

Diluted income per share from continuing operations

$

2.44

 

 

$

0.95

 

 

$

1.49

 

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

96.5

 

 

$

37.6

 

 

$

58.8

 

Loss on debt extinguishment (in millions)

$

(1.6

)

 

$

 

 

$

(1.6

)

Inventory impairments and abandonments (in millions)

$

(0.7

)

 

$

(2.3

)

 

$

1.6

 

Restructuring and severance charges

$

 

 

$

(1.4

)

 

$

1.4

 

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

$

98.8

 

 

$

41.3

 

 

$

57.5

 

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

$

75.6

 

 

$

31.4

 

 

$

44.2

 

 

 

 

 

 

 

Net income

$

73.7

 

 

$

28.5

 

 

$

45.1

 

 

 

 

 

 

 

Land and land development spending (in millions)

$

349.9

 

 

$

324.7

 

 

$

25.2

 

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

186.6

 

 

$

127.3

 

 

$

59.4

 

*

Change and totals are calculated using unrounded numbers.

(a)

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

(b)

For the nine months ended June 30, 2021, loss on debt extinguishment and inventory impairments and abandonments were tax-effected at the effective tax rate of 24.0%. For the nine months ended June 30, 2020, inventory impairments and abandonments and restructuring and severance charges were tax-effected at the effective tax rate of 26.4%

“LTM” indicates amounts for the trailing 12 months.

 

As of June 30,

 

2021

 

2020

 

Change

Backlog units

 

3,124

 

 

 

2,237

 

39.7

%

Dollar value of backlog (in millions)

$

1,354.6

 

 

$

884.9

 

 

53.1

%

ASP in backlog (in thousands)

$

433.6

 

 

$

395.6

 

 

9.6

%

Land and lots controlled

 

19,761

 

 

 

18,093

 

 

9.2

%

Conference Call

The Company will hold a conference call on July 29, 2021 at 5:00 p.m. ET to discuss these results. Interested parties may listen to the conference call and view the Company’s slide presentation on the “Investor Relations” page of the Company’s website, www.beazer.com. In addition, the conference call will be available by telephone at 800-475-0542 (for international callers, dial 517-308-9429). To be admitted to the call, enter the pass code “8571348″. A replay of the conference call will be available, until 10:00 PM ET on August 6, 2021 at 800-391-9853 (for international callers, dial 203-369-3269) with pass code “3794.”

About Beazer Homes

Headquartered in Atlanta, Beazer Homes (NYSE: BZH) is one of the country’s largest homebuilders. Every Beazer home is designed and built to provide Surprising Performance, giving you more quality and more comfort from the moment you move in – saving you money every month. With Beazer’s Choice Plans™, you can personalize your primary living areas – giving you a choice of how you want to live in the home, at no additional cost. And unlike most national homebuilders, we empower our customers to shop and compare loan options. Our Mortgage Choice program gives you the resources to easily compare multiple loan offers and choose the best lender and loan offer for you, which will save you thousands over the life of your loan.

We build our homes in Arizona, California, Delaware, Florida, Georgia, Indiana, Maryland, Nevada, North Carolina, South Carolina, Tennessee, Texas, and Virginia. For more information, visit beazer.com, or check out Beazer on Facebook, Instagram and Twitter.

This press release contains forward-looking statements. These forward-looking statements represent our expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, among other things: (i) the cyclical nature of the homebuilding industry and a potential deterioration in homebuilding industry conditions; (ii) economic changes nationally or in local markets, changes in consumer confidence, wage levels, declines in employment levels, inflation and governmental actions, each of which is outside our control and affects the affordability of and demand for, the homes we sell; (iii) potential negative impacts of the COVID-19 pandemic, which, in addition to exacerbating each of the risks listed above and below, may include a significant decrease in demand for our homes or consumer confidence generally with respect to purchasing a home, an inability to sell and build homes in a typical manner or at all, increased costs or decreased supply of building materials, including lumber, or the availability of subcontractors, housing inspectors, and other third-parties we rely on to support our operations, and recognizing charges in future periods, which may be material, for goodwill impairments, inventory impairments and/or land option contract abandonments; (iv) shortages of or increased prices for labor, land or raw materials used in housing production, and the level of quality and craftsmanship provided by our subcontractors; (v) the availability and cost of land and the risks associated with the future value of our inventory, such as asset impairment charges we took on select California assets during the second quarter of fiscal 2019; (vi) factors affecting margins, such as decreased land values underlying land option agreements, increased land development costs in communities under development or delays or difficulties in implementing initiatives to reduce our production and overhead cost structure; (vii) our ability to raise debt and/or equity capital, due to factors such as limitations in the capital markets (including market volatility) or adverse credit market conditions, and our ability to otherwise meet our ongoing liquidity needs (which could cause us to fail to meet the terms of our covenants and other requirements under our various debt instruments and therefore trigger an acceleration of a significant portion or all of our outstanding debt obligations), including the impact of any downgrades of our credit ratings or reduction in our liquidity levels; (viii) market perceptions regarding any capital raising initiatives we may undertake (including future issuances of equity or debt capital); (ix) terrorist acts, protests and civil unrest, political uncertainty, natural disasters, acts of war or other factors over which the Company has no control; (x) inaccurate estimates related to homes to be delivered in the future (backlog), as they are subject to various cancellation risks that cannot be fully controlled; (xi) increases in mortgage interest rates, increased disruption in the availability of mortgage financing, changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes or an increased number of foreclosures; (xii) increased competition or delays in reacting to changing consumer preferences in home design; (xiii) natural disasters or other related events that could result in delays in land development or home construction, increase our costs or decrease demand in the impacted areas; (xiv) the potential recoverability of our deferred tax assets; (xv) increases in corporate tax rates; (xvi) potential delays or increased costs in obtaining necessary permits as a result of changes to, or complying with, laws, regulations or governmental policies, and possible penalties for failure to comply with such laws, regulations or governmental policies, including those related to the environment; (xvii) the results of litigation or government proceedings and fulfillment of any related obligations; (xviii) the impact of construction defect and home warranty claims; (xix) the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred; (xx) the impact of information technology failures, cybersecurity issues or data security breaches; or (xxi) the impact on homebuilding in key markets of governmental regulations limiting the availability of water.

Any forward-looking statement, including any statement expressing confidence regarding future outcomes, speaks only as of the date on which such statement is made and, except as required by law, we undertake no obligation to update any forward-looking statement to reflect events or circumstances after the date on which such statement is made or to reflect the occurrence of unanticipated events. New factors emerge from time-to-time, and it is not possible to predict all such factors.

-Tables Follow-

 

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

June 30,

 

June 30,

in thousands (except per share data)

2021

 

2020

 

2021

 

2020

Total revenue

$

570,932

 

 

$

533,112

 

 

$

1,549,360

 

 

$

1,440,329

 

Home construction and land sales expenses

 

455,178

 

 

 

441,788

 

 

 

1,259,922

 

 

 

1,207,023

 

Inventory impairments and abandonments

 

231

 

 

 

2,266

 

 

 

696

 

 

 

2,266

 

Gross profit

 

115,523

 

 

 

89,058

 

 

 

288,742

 

 

 

231,040

 

Commissions

 

20,955

 

 

 

20,851

 

 

 

58,346

 

 

 

55,660

 

General and administrative expenses

 

42,186

 

 

 

41,276

 

 

 

119,903

 

 

 

121,025

 

Depreciation and amortization

 

3,689

 

 

 

3,780

 

 

 

10,494

 

 

 

10,834

 

Operating income

 

48,693

 

 

 

23,151

 

 

 

99,999

 

 

 

43,521

 

Equity in income of unconsolidated entities

 

313

 

 

 

4

 

 

 

424

 

 

 

138

 

Loss on extinguishment of debt

 

(1,050

)

 

 

 

 

 

(1,613

)

 

 

 

Other expense, net

 

(10

)

 

 

(2,904

)

 

 

(2,356

)

 

 

(6,030

)

Income from continuing operations before income taxes

 

47,946

 

 

 

20,251

 

 

 

96,454

 

 

 

37,629

 

Expense from income taxes

 

10,804

 

 

 

4,981

 

 

 

22,633

 

 

 

8,940

 

Income from continuing operations, net of tax

 

37,142

 

 

 

15,270

 

 

 

73,821

 

 

 

28,689

 

Loss from discontinued operations, net of tax

 

(7

)

 

 

(82

)

 

 

(161

)

 

 

(141

)

Net income

$

37,135

 

 

$

15,188

 

 

$

73,660

 

 

$

28,548

 

Weighted average number of shares:

 

 

 

 

 

 

 

Basic

 

30,022

 

 

 

29,597

 

 

 

29,915

 

 

 

29,738

 

Diluted

 

30,562

 

 

 

29,674

 

 

 

30,292

 

 

 

30,014

 

 

 

 

 

 

 

 

 

Basic income (loss) per share:

 

 

 

 

 

 

 

Continuing operations

$

1.24

 

 

$

0.51

 

 

$

2.47

 

 

$

0.96

 

Discontinued operations

 

 

 

 

 

 

 

(0.01

)

 

 

 

Total

$

1.24

 

 

$

0.51

 

 

$

2.46

 

 

$

0.96

 

Diluted income (loss) per share:

 

 

 

 

 

 

 

Continuing operations

$

1.22

 

 

$

0.51

 

 

$

2.44

 

 

$

0.95

 

Discontinued operations

 

 

 

 

 

 

 

(0.01

)

 

 

 

Total

$

1.22

 

 

$

0.51

 

 

$

2.43

 

 

$

0.95

 

 

Three Months Ended

 

Nine Months Ended

 

June 30,

 

June 30,

Capitalized Interest in Inventory

2021

 

2020

 

2021

 

2020

Capitalized interest in inventory, beginning of period

$

113,414

 

 

$

134,693

 

 

$

119,659

 

 

$

136,565

 

Interest incurred

 

19,270

 

 

 

23,012

 

 

 

58,517

 

 

 

66,839

 

Capitalized interest impaired

 

 

 

 

(792

)

 

 

 

 

 

(792

)

Interest expense not qualified for capitalization and included as other expense

 

(212

)

 

 

(3,003

)

 

 

(2,781

)

 

 

(6,373

)

Capitalized interest amortized to home construction and land sales expenses

 

(22,529

)

 

 

(21,814

)

 

 

(65,452

)

 

 

(64,143

)

Capitalized interest in inventory, end of period

$

109,943

 

 

$

132,096

 

 

$

109,943

 

 

$

132,096

 

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

in thousands (except share and per share data)

June 30, 2021

 

September 30, 2020

ASSETS

 

 

 

Cash and cash equivalents

$

358,334

 

 

$

327,693

 

Restricted cash

 

24,690

 

 

 

14,835

 

Accounts receivable (net of allowance of $292 and $358, respectively)

 

23,028

 

 

 

19,817

 

Income tax receivable

 

9,502

 

 

 

9,252

 

Owned inventory

 

1,408,071

 

 

 

1,350,738

 

Investments in unconsolidated entities

 

4,361

 

 

 

4,003

 

Deferred tax assets, net

 

204,729

 

 

 

225,143

 

Property and equipment, net

 

22,055

 

 

 

22,280

 

Operating lease right-of-use assets

 

13,015

 

 

 

13,103

 

Goodwill

 

11,376

 

 

 

11,376

 

Other assets

 

13,468

 

 

 

9,240

 

Total assets

$

2,092,629

 

 

$

2,007,480

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Trade accounts payable

$

155,084

 

 

$

132,192

 

Operating lease liabilities

 

14,813

 

 

 

15,333

 

Other liabilities

 

139,074

 

 

 

135,983

 

Total debt (net of debt issuance costs of $9,444 and $10,891, respectively)

 

1,110,053

 

 

 

1,130,801

 

Total liabilities

 

1,419,024

 

 

 

1,414,309

 

Stockholders’ equity:

 

 

 

Preferred stock (par value $0.01 per share, 5,000,000 shares authorized, no shares issued)

 

 

 

 

 

Common stock (par value $0.001 per share, 63,000,000 shares authorized, 31,293,798 issued and outstanding and 31,012,326 issued and outstanding, respectively)

 

31

 

 

 

31

 

Paid-in capital

 

863,240

 

 

 

856,466

 

Accumulated deficit

 

(189,666

)

 

 

(263,326

)

Total stockholders’ equity

 

673,605

 

 

 

593,171

 

Total liabilities and stockholders’ equity

$

2,092,629

 

 

$

2,007,480

 

 

 

 

 

Inventory Breakdown

 

 

 

Homes under construction

$

668,280

 

 

$

525,021

 

Development projects in progress

 

532,929

 

 

 

589,763

 

Land held for future development

 

19,879

 

 

 

28,531

 

Land held for sale

 

7,173

 

 

 

12,622

 

Capitalized interest

 

109,943

 

 

 

119,659

 

Model homes

 

69,867

 

 

 

75,142

 

Total owned inventory

$

1,408,071

 

 

$

1,350,738

 

BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS

 

 

 

 

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

SELECTED OPERATING DATA

2021

 

2020

 

2021

 

2020

Closings:

 

 

 

 

 

 

 

West region

765

 

 

819

 

2,164

 

2,248

East region

 

330

 

 

 

220

 

 

 

874

 

 

 

647

 

Southeast region

 

283

 

 

 

327

 

 

 

842

 

 

 

860

 

Total closings

 

1,378

 

 

 

1,366

 

 

 

3,880

 

 

 

3,755

 

 

 

 

 

 

 

 

 

New orders, net of cancellations:

 

 

 

 

 

 

 

West region

 

715

 

 

 

775

 

 

 

2,613

 

 

 

2,465

 

East region

 

263

 

 

 

287

 

 

 

940

 

 

 

871

 

Southeast region

 

221

 

 

 

310

 

 

 

942

 

 

 

948

 

Total new orders, net

 

1,199

 

 

 

1,372

 

 

 

4,495

 

 

 

4,284

 

 

As of June 30,

Backlog units at end of period:

2021

 

2020

West region

 

1,814

 

 

 

1,199

 

East region

 

690

 

 

 

565

 

Southeast region

 

620

 

 

 

473

 

Total backlog units

 

3,124

 

 

 

2,237

 

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

$

1,354.6

 

 

$

884.9

in thousands

Three Months Ended June 30,

 

Nine Months Ended June 30,

SUPPLEMENTAL FINANCIAL DATA

2021

 

2020

 

2021

 

2020

Homebuilding revenue:

 

 

 

 

 

 

 

West region

$

294,834

 

$

303,500

 

 

$

805,617

 

$

825,129

 

East region

 

160,393

 

 

 

108,126

 

 

 

410,350

 

 

 

295,782

 

Southeast region

 

111,703

 

 

 

120,839

 

 

 

322,609

 

 

 

316,939

 

Total homebuilding revenue

$

566,930

 

 

$

532,465

 

 

$

1,538,576

 

 

$

1,437,850

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Homebuilding

$

566,930

 

 

$

532,465

 

 

$

1,538,576

 

 

$

1,437,850

 

Land sales and other

 

4,002

 

 

 

647

 

 

 

10,784

 

 

 

2,479

 

Total revenue

$

570,932

 

 

$

533,112

 

 

$

1,549,360

 

 

$

1,440,329

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

Homebuilding

$

114,710

 

 

$

90,282

 

 

$

287,003

 

 

$

232,134

 

Land sales and other

 

813

 

 

 

(1,224

)

 

 

1,739

 

 

 

(1,094

)

Total gross profit

$

115,523

 

 

$

89,058

 

 

$

288,742

 

 

$

231,040

 

Reconciliation of homebuilding gross profit and the related gross margin before impairments and abandonments and interest amortized to cost of sales to homebuilding gross profit and gross margin, the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that this information assists investors in comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies’ respective level of impairments/abandonments and level of debt.

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

in thousands

2021

 

2020

 

2021

 

2020

Homebuilding gross profit/margin

$

114,710

 

20.2

%

 

$

90,282

 

17.0

%

 

$

287,003

 

18.7

%

 

$

232,134

 

16.1

%

Inventory impairments and abandonments (I&A)

 

231

 

 

 

 

1,009

 

 

 

 

696

 

 

 

 

1,009

 

 

Homebuilding gross profit/margin before I&A

 

114,941

 

20.3

%

 

 

91,291

 

17.1

%

 

 

287,699

 

18.7

%

 

 

233,143

 

16.2

%

Interest amortized to cost of sales

 

22,529

 

 

 

 

21,814

 

 

 

 

65,199

 

 

 

 

64,143

 

 

Homebuilding gross profit/margin before I&A and interest amortized to cost of sales

$

137,470

 

24.2

%

 

$

113,105

 

21.2

%

 

$

352,898

 

22.9

%

 

$

297,286

 

20.7

%

Reconciliation of Adjusted EBITDA to total company net income, the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that Adjusted EBITDA assists investors in understanding and comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies’ respective capitalization, tax position, and level of impairments. These EBITDA measures should not be considered alternatives to net income determined in accordance with GAAP as an indicator of operating performance.

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

 

LTM Ended

in thousands

2021

 

2020

 

2021

 

2020

 

2021

 

2020

Net income

$

37,135

 

$

15,188

 

$

73,660

 

 

$

28,548

 

$

97,338

 

 

$

30,977

Expense from income taxes

 

10,801

 

 

4,958

 

 

22,587

 

 

 

8,900

 

 

31,351

 

 

 

15,934

Interest amortized to home construction and land sales expenses and capitalized interest impaired

 

22,529

 

 

22,606

 

 

65,452

 

 

 

64,935

 

 

96,179

 

 

 

102,350

Interest expense not qualified for capitalization

 

212

 

 

3,003

 

 

2,781

 

 

 

6,373

 

 

4,876

 

 

 

7,682

EBIT

 

70,677

 

 

45,755

 

 

164,480

 

 

 

108,756

 

 

229,744

 

 

 

156,943

Depreciation and amortization

 

3,689

 

 

3,780

 

 

10,494

 

 

 

10,834

 

 

15,300

 

 

 

16,681

EBITDA

 

74,366

 

 

49,535

 

 

174,974

 

 

 

119,590

 

 

245,044

 

 

 

173,624

Stock-based compensation expense

 

3,194

 

 

1,659

 

 

9,254

 

 

 

4,869

 

 

14,421

 

 

 

7,402

Loss on extinguishment of debt

 

1,050

 

 

 

 

1,613

 

 

 

 

 

1,613

 

 

 

25,494

Inventory impairments and abandonments (b)

 

231

 

 

1,474

 

 

696

 

 

 

1,474

 

 

1,333

 

 

 

1,474

Restructuring and severance expenses

 

 

 

1,361

 

 

(10

)

 

 

1,361

 

 

(54

)

 

 

1,361

Litigation settlement in discontinued operations

 

 

 

 

$

120

 

 

$

 

 

1,380

 

 

 

Adjusted EBITDA

$

78,841

 

$

54,029

 

$

186,647

 

 

$

127,294

 

$

263,737

 

 

$

209,355

(a)

“LTM” indicates amounts for the trailing 12 months.

(b)

In periods during which we impaired certain of our inventory assets, capitalized interest that is impaired is included in the line above titled “Interest amortized to home construction and land sales expenses and capitalized interest impaired.”

 

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