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Beazer Homes Reports Strong Third Quarter Fiscal 2022 Results

Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three and nine months ended June 30, 2022.

“We generated very strong third quarter financial results,” said Allan P. Merrill, the Company’s Chairman and Chief Executive Officer. “Increases in both home prices and gross margin allowed us to significantly improve profitability despite continuing supply chain challenges. We also increased our lot position and reduced leverage as we continued to demonstrate positive results from our Balanced Growth strategy.”

Commenting on market conditions and updated fiscal 2022 full-year expectations, Mr. Merrill said, “The environment for new home sales became significantly more challenging during our third quarter, as higher mortgage rates and rapid inflation – among other macro-economic headwinds – negatively impacted homebuyer sentiment and behavior. While the structural demand for new homes remains quite strong, many prospective customers are delaying purchase decisions.”

“Despite near-term pressures on new home sales, the size of our backlog provides excellent visibility into full year financial results. Accordingly, we now expect to generate fiscal year 2022 earnings per share of approximately $6.50, inclusive of previously disclosed tax benefits of approximately $0.40 per share. We also expect to reduce debt below $1 billion by year end.”

Looking further out, Mr. Merrill concluded, “We remain confident in the long-term prospects of our business and the new home industry. The gap between the structural demand for homes and the likely supply of homes – which has given rise to a multimillion home deficit over the past decade – remains in place. In the quarters ahead, we expect consumers will adjust to a higher rate environment and that builders will modify the size, features and pricing of new homes to address affordability challenges. Balancing the opportunities and the challenges, we remain confident that we will be able to create durable value for our stakeholders, as we operate from a less leveraged and more efficient balance sheet and execute on our ESG initiatives.”

Beazer Homes Fiscal Third Quarter 2022 Highlights and Comparison to Fiscal Third Quarter 2021

  • Net income from continuing operations of $54.3 million, or $1.76 per diluted share, compared to net income from continuing operations of $37.1 million, or $1.22 per diluted share, in fiscal third quarter 2021
  • Adjusted EBITDA of $88.2 million, up 11.9%
  • Homebuilding revenue of $523.2 million, down 7.7% on a 24.3% decrease in home closings to 1,043, partially offset by a 21.9% increase in average selling price to $501.7 thousand
  • Homebuilding gross margin was 25.1%, up 490 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 28.1%, up 390 basis points
  • SG&A as a percentage of total revenue was 11.8%, up 70 basis points year-over-year
  • Net new orders of 925, down 22.9% on a 22.9% decrease in orders/community/month to 2.5 on a flat average community count of 123
  • Backlog dollar value of $1,588.0 million, up 17.2% on a 22.0% increase in average selling price of homes in backlog to $528.8 thousand, partially offset by a 3.9% decrease in backlog units to 3,003
  • Controlled lots of 24,899, up 26.0% from 19,761
  • Land acquisition and land development spending was $159.5 million, up 11.5% from $143.0 million
  • Retired $1.7 million of the 6.750% unsecured Senior Notes due March 2025
  • Repurchased $2.5 million of shares through open market transactions
  • Unrestricted cash at quarter end was $42.0 million; total liquidity was $290.2 million

The following provides additional details on the Company's performance during the fiscal third quarter 2022:

Profitability. Net income from continuing operations was $54.3 million, generating diluted earnings per share of $1.76. This included the impact of energy efficiency tax credits of $2.7 million, or $0.09 per share. Third quarter adjusted EBITDA of $88.2 million was up $9.4 million, or 11.9%, year-over-year. The increase in profitability was primarily driven by higher homebuilding gross margin.

Orders. Net new orders for the third quarter decreased to 925, down 22.9% from 1,199 in the prior year period. The decrease in net new orders was driven by a 22.9% decrease in sales pace to 2.5 orders per community per month, down from 3.2 in the prior year period. The cancellation rate for the quarter was 17.0%, up from 10.9% in the prior year period. Although up year-over year, the cancellation rate was well within our historical normal range.

Backlog. The dollar value of homes in backlog as of June 30, 2022 increased 17.2% to $1,588.0 million, representing 3,003 homes, compared to $1,354.6 million, representing 3,124 homes, at the same time last year. The average selling price of homes in backlog was $528.8 thousand, up 22.0% versus the previous year.

Homebuilding Revenue. Third quarter homebuilding revenue was $523.2 million, down 7.7% year-over-year. The decrease in homebuilding revenue was driven by a 24.3% decrease in home closings to 1,043 homes, partially offset by a 21.9% increase in the average selling price to $501.7 thousand.

Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 28.1% for the third quarter, up 390 basis points year-over-year, driven primarily by pricing increases and lower sales incentives.

SG&A Expenses. Selling, general and administrative expenses as a percentage of total revenue was 11.8% for the quarter, up 70 basis points year-over-year primarily due to decreases in closings and revenue, while SG&A on an absolute dollar basis decreased by $1.1 million, or 1.7%, year-over-year.

Land Position. Controlled lots increased 26.0% to 24,899, compared to 19,761 in the prior year. Excluding land held for future development and land held for sale lots, active controlled lots were 24,132, up 25.2% year-over-year. The Company had 12,571 lots, or 52.1% of its total active lots, under option contracts compared to 9,263 lots, or 48.1% of its total active lots, under option contracts a year ago.

Share and Debt Repurchases. The Company repurchased $1.7 million of its outstanding 6.750% unsecured Senior Notes due March 2025 at an average price of $94.423 per $100 principal amount. In addition, the Company repurchased $2.5 million of shares through open market transactions during the quarter.

Liquidity. At the close of the third quarter, the Company had approximately $290.2 million of available liquidity, including $42.0 million of unrestricted cash.

Commitment to ESG

In May 2022, the Company received the 2022 ENERGY STAR Partner of the Year - Sustained Excellence Award for the seventh consecutive year from the U.S. Environmental Protection Agency (EPA) and the U.S. Department of Energy (DOE). This award highlights the Company’s dedication to continually enhancing the energy efficiency of its homes and as a result making the total cost of homeownership more affordable for the customer.

Demonstrating recognition for the Company's efforts to create and sustain a strong reputation among employees, shareholders, customers and other partners, Beazer Homes was ranked first among construction companies in Newsweek's inaugural list of America's Most Trusted Companies 2022. This award was presented to the Company in April 2022 by Newsweek and Statista Inc. America's Most Trusted Companies 2022 were identified based on an independent survey of approximately 50,000 U.S. residents who rated companies they knew from the perspective of customers, investors and employees.

Summary results for the three and nine months ended June 30, 2022 are as follows:

 

Three Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

Change*

New home orders, net of cancellations

 

925

 

 

 

1,199

 

 

(22.9

) %

Orders per community per month

 

2.5

 

 

 

3.2

 

 

(22.9

) %

Average active community count

 

123

 

 

 

123

 

 

%

Actual community count at quarter-end

 

124

 

 

 

120

 

 

3.3

%

Cancellation rates

 

17.0

%

 

 

10.9

%

 

610 bps

 

 

 

 

 

 

Total home closings

 

1,043

 

 

 

1,378

 

 

(24.3

) %

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

$

501.7

 

 

$

411.4

 

 

21.9

%

Homebuilding revenue (in millions)

$

523.2

 

 

$

566.9

 

 

(7.7

) %

Homebuilding gross margin

 

25.1

%

 

 

20.2

%

 

490 bps

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

 

25.1

%

 

 

20.3

%

 

480 bps

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

 

28.1

%

 

 

24.2

%

 

390 bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

67.5

 

 

$

47.9

 

 

40.7

%

Expense from income taxes (in millions)

$

13.2

 

 

$

10.8

 

 

21.7

%

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

$

54.3

 

 

$

37.1

 

 

46.2

%

Basic income per share from continuing operations

$

1.78

 

 

$

1.24

 

 

43.5

%

Diluted income per share from continuing operations

$

1.76

 

 

$

1.22

 

 

44.3

%

 

 

 

 

 

 

Net income

$

54.3

 

 

$

37.1

 

 

46.3

%

 

 

 

 

 

 

Land and land development spending (in millions)

$

159.5

 

 

$

143.0

 

 

11.5

%

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

88.2

 

 

$

78.8

 

 

11.9

%

LTM Adjusted EBITDA (in millions)

$

302.8

 

 

$

263.7

 

 

14.8

%

* Change and totals are calculated using unrounded numbers.

"LTM" indicates amounts for the trailing 12 months.

 

Nine Months Ended June 30,

 

 

2022

 

 

 

2021

 

 

Change*

New home orders, net of cancellations

 

3,357

 

 

 

4,495

 

 

(25.3

) %

LTM orders per community per month

 

3.1

 

 

 

4.0

 

 

(22.5

) %

Cancellation rates

 

13.5

%

 

 

11.0

%

 

250 bps

 

 

 

 

 

 

Total home closings

 

3,140

 

 

 

3,880

 

 

(19.1

) %

ASP from closings (in thousands)

$

470.4

 

 

$

396.5

 

 

18.6

%

Homebuilding revenue (in millions)

$

1,477.2

 

 

$

1,538.6

 

 

(4.0

) %

Homebuilding gross margin

 

23.3

%

 

 

18.7

%

 

460 bps

Homebuilding gross margin, excluding I&A

 

23.3

%

 

 

18.7

%

 

460 bps

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

 

26.5

%

 

 

22.9

%

 

360 bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

163.6

 

 

$

96.5

 

 

69.6

%

Expense from income taxes (in millions)

$

29.7

 

 

$

22.6

 

 

31.2

%

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

$

133.9

 

 

$

73.8

 

 

81.4

%

Basic income per share from continuing operations

$

4.39

 

 

$

2.47

 

 

77.7

%

Diluted income per share from continuing operations

$

4.35

 

 

$

2.44

 

 

78.3

%

 

 

 

 

 

 

Net income

$

133.9

 

 

$

73.7

 

 

81.8

%

 

 

 

 

 

 

Land and land development spending (in millions)

$

422.8

 

 

$

349.9

 

 

20.8

%

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

226.7

 

 

$

186.6

 

 

21.5

%

* Change and totals are calculated using unrounded numbers.

"LTM" indicates amounts for the trailing 12 months.

 

As of June 30,

 

 

2022

 

 

2021

 

Change

Backlog units

 

3,003

 

 

3,124

 

(3.9

) %

Dollar value of backlog (in millions)

$

1,588.0

 

$

1,354.6

 

17.2

%

ASP in backlog (in thousands)

$

528.8

 

$

433.6

 

22.0

%

Land and lots controlled

 

24,899

 

 

19,761

 

26.0

%

Conference Call

The Company will hold a conference call on July 28, 2022 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 4, 2022 at 888-566-0401 (for international callers, dial 203-369-3040) with pass code “3740.”

About Beazer Homes

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

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

This press release contains forward-looking statements. These forward-looking statements represent our expectations or beliefs concerning future events, and it is possible that the results described in this press release will not be achieved. These forward-looking statements are subject to risks, uncertainties and other factors, many of which are outside of our control, that could cause actual results to differ materially from the results discussed in the forward-looking statements, including, among other things: (i) the cyclical nature of the homebuilding industry and further deterioration in homebuilding industry conditions; (ii) continued increases in mortgage interest rates and reduced availability of mortgage financing due to, among other factors, recent and likely continued actions by the Federal Reserve to address sharp increases in inflation; (iii) other economic changes nationally and in local markets, including changes in consumer confidence, wage levels, declines in employment levels, and an increase in the number of foreclosures, each of which is outside our control and affects the affordability of, and demand for, the homes we sell; (iv) continued supply chain challenges negatively impacting our homebuilding production, including shortages of raw materials and other critical components such as windows, doors, and appliances; (v) continued shortages of or increased costs for labor used in housing production, and the level of quality and craftsmanship provided by such labor; (vi) 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; (vii) factors affecting margins, such as increased sales incentives and mortgage rate buy down programs; decreased revenues; 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; not being able to pass on cost increases through pricing increases; (viii) 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; (ix) 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; (x) market perceptions regarding any capital raising initiatives we may undertake (including future issuances of equity or debt capital); (xi) 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; (xii) changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes; (xiii) increased competition or delays in reacting to changing consumer preferences in home design; (xiv) 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; (xv) the potential recoverability of our deferred tax assets; (xvi) increases in corporate tax rates; (xvii) 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; (xviii) the results of litigation or government proceedings and fulfillment of any related obligations; (xix) the impact of construction defect and home warranty claims; (xx) the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred; (xxi) the impact of information technology failures, cybersecurity issues or data security breaches; (xxii) the impact of governmental regulations on homebuilding in key markets, such as regulations limiting the availability of water; (xxiii) the success of our ESG initiatives, including our ability to meet our goal that every home we build will be Net Zero Energy Ready by 2025 as well as the success of any other related partnerships or pilot programs we may enter into in order to increase the energy efficiency of our homes and prepare for a Net Zero future; and (xxiv) terrorist acts, protests and civil unrest, political uncertainty, acts of war or other factors over which the Company has no control.

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)

 

2022

 

 

2021

 

 

 

2022

 

 

 

2021

 

Total revenue

$

526,666

 

$

570,932

 

 

$

1,489,321

 

 

$

1,549,360

 

Home construction and land sales expenses

 

394,201

 

 

455,178

 

 

 

1,138,771

 

 

 

1,259,922

 

Inventory impairments and abandonments

 

 

 

231

 

 

 

935

 

 

 

696

 

Gross profit

 

132,465

 

 

115,523

 

 

 

349,615

 

 

 

288,742

 

Commissions

 

16,277

 

 

20,955

 

 

 

48,668

 

 

 

58,346

 

General and administrative expenses

 

45,760

 

 

42,186

 

 

 

129,057

 

 

 

119,903

 

Depreciation and amortization

 

3,189

 

 

3,689

 

 

 

9,101

 

 

 

10,494

 

Operating income

 

67,239

 

 

48,693

 

 

 

162,789

 

 

 

99,999

 

Equity in income of unconsolidated entities

 

3

 

 

313

 

 

 

454

 

 

 

424

 

Gain (loss) on extinguishment of debt, net

 

86

 

 

(1,050

)

 

 

(78

)

 

 

(1,613

)

Other income (expense), net

 

134

 

 

(10

)

 

 

405

 

 

 

(2,356

)

Income from continuing operations before income taxes

 

67,462

 

 

47,946

 

 

 

163,570

 

 

 

96,454

 

Expense from income taxes

 

13,150

 

 

10,804

 

 

 

29,685

 

 

 

22,633

 

Income from continuing operations

 

54,312

 

 

37,142

 

 

 

133,885

 

 

 

73,821

 

Income (loss) from discontinued operations, net of tax

 

12

 

 

(7

)

 

 

(4

)

 

 

(161

)

Net income

$

54,324

 

$

37,135

 

 

$

133,881

 

 

$

73,660

 

Weighted-average number of shares:

 

 

 

 

 

 

 

Basic

 

30,512

 

 

30,022

 

 

 

30,480

 

 

 

29,915

 

Diluted

 

30,872

 

 

30,562

 

 

 

30,806

 

 

 

30,292

 

 

 

 

 

 

 

 

 

Basic income (loss) per share:

 

 

 

 

 

 

 

Continuing operations

$

1.78

 

$

1.24

 

 

$

4.39

 

 

$

2.47

 

Discontinued operations

 

 

 

 

 

 

 

 

 

(0.01

)

Total

$

1.78

 

$

1.24

 

 

$

4.39

 

 

$

2.46

 

Diluted income (loss) per share:

 

 

 

 

 

 

 

Continuing operations

$

1.76

 

$

1.22

 

 

$

4.35

 

 

$

2.44

 

Discontinued operations

 

 

 

 

 

 

 

 

 

(0.01

)

Total

$

1.76

 

$

1.22

 

 

$

4.35

 

 

$

2.43

 

 

Three Months Ended

 

Nine Months Ended

 

June 30,

 

June 30,

Capitalized Interest in Inventory

 

2022

 

 

 

2021

 

 

 

2022

 

 

 

2021

 

Capitalized interest in inventory, beginning of period

$

112,686

 

 

$

113,414

 

 

$

106,985

 

 

$

119,659

 

Interest incurred

 

18,728

 

 

 

19,270

 

 

 

55,292

 

 

 

58,517

 

Interest expense not qualified for capitalization and included as other expense

 

 

 

 

(212

)

 

 

 

 

 

(2,781

)

Capitalized interest amortized to home construction and land sales expenses

 

(15,679

)

 

 

(22,529

)

 

 

(46,542

)

 

 

(65,452

)

Capitalized interest in inventory, end of period

$

115,735

 

 

$

109,943

 

 

$

115,735

 

 

$

109,943

 

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

in thousands (except share and per share data)

June 30, 2022

 

September 30, 2021

ASSETS

 

 

 

Cash and cash equivalents

$

42,039

 

 

$

246,715

 

Restricted cash

 

39,762

 

 

 

27,428

 

Accounts receivable (net of allowance of 284 and $290, respectively)

 

25,137

 

 

 

25,685

 

Income tax receivable

 

9,929

 

 

 

9,929

 

Owned inventory

 

1,858,851

 

 

 

1,501,602

 

Investments in unconsolidated entities

 

897

 

 

 

4,464

 

Deferred tax assets, net

 

179,038

 

 

 

204,766

 

Property and equipment, net

 

24,971

 

 

 

22,885

 

Operating lease right-of-use assets

 

10,641

 

 

 

12,344

 

Goodwill

 

11,376

 

 

 

11,376

 

Other assets

 

15,759

 

 

 

11,616

 

Total assets

$

2,218,400

$

2,078,810

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Trade accounts payable

$

145,864

 

 

$

133,391

 

Operating lease liabilities

 

12,155

 

 

 

14,154

 

Other liabilities

 

155,176

 

 

 

152,351

 

Total debt (net of debt issuance costs of $7,752 and $8,983, respectively)

 

1,049,078

 

 

 

1,054,030

 

Total liabilities

 

1,362,273

 

 

 

1,353,926

 

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, 31,275,185

issued and outstanding and 31,294,198 issued and outstanding, respectively)

 

31

 

 

 

31

 

Paid-in capital

 

863,520

 

 

 

866,158

 

Accumulated deficit

 

(7,424

)

 

 

(141,305

)

Total stockholders’ equity

 

856,127

 

 

 

724,884

 

Total liabilities and stockholders’ equity

$

2,218,400

 

 

$

2,078,810

 

 

 

 

 

Inventory Breakdown

 

 

 

Homes under construction

$

976,590

 

 

$

648,283

 

Land under development

 

659,057

 

 

 

648,404

 

Land held for future development

 

19,879

 

 

 

19,879

 

Land held for sale

 

13,598

 

 

 

9,179

 

Capitalized interest

 

115,735

 

 

 

106,985

 

Model homes

 

73,992

 

 

 

68,872

Total owned inventory

$

1,858,851

 

$

1,501,602

BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS

 

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

SELECTED OPERATING DATA

2022

 

2021

 

2022

 

2021

Closings:

 

 

 

 

 

 

 

West region

666

 

765

 

1,934

 

2,164

East region

212

 

330

 

709

 

874

Southeast region

165

 

283

 

497

 

842

Total closings

1,043

 

1,378

 

3,140

 

3,880

 

 

 

 

 

 

 

 

New orders, net of cancellations:

 

 

 

 

 

 

 

West region

576

 

715

 

2,063

 

2,613

East region

192

 

263

 

712

 

940

Southeast region

157

 

221

 

582

 

942

Total new orders, net

925

 

1,199

 

3,357

 

4,495

 

 

 

 

 

As of June 30,

Backlog units:

 

 

 

 

2022

 

2021

West region

 

 

 

 

1,782

 

1,814

East region

 

 

 

 

614

 

690

Southeast region

 

 

 

 

607

 

620

Total backlog units

 

 

 

 

3,003

 

3,124

Aggregate dollar value of homes in backlog (in millions)

 

 

 

 

$ 1,588.0

 

$ 1,354.6

ASP in backlog (in thousands)

 

 

 

 

$ 528.8

 

$ 433.6

in thousands

Three Months Ended June 30,

 

Nine Months Ended June 30,

SUPPLEMENTAL FINANCIAL DATA

 

2022

 

 

2021

 

 

2022

 

 

2021

Homebuilding revenue:

 

 

 

 

 

 

 

West region

$

324,074

 

$

294,834

 

$

883,453

 

$

805,617

East region

 

112,237

 

 

160,393

 

 

354,948

 

 

410,350

Southeast region

 

86,918

 

 

111,703

 

 

238,765

 

 

322,609

Total homebuilding revenue

$

523,229

 

$

566,930

 

$

1,477,166

 

$

1,538,576

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Homebuilding

$

523,229

 

$

566,930

 

$

1,477,166

 

$

1,538,576

Land sales and other

 

3,437

 

 

4,002

 

 

12,155

 

 

10,784

Total revenue

$

526,666

 

$

570,932

 

$

1,489,321

 

$

1,549,360

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

Homebuilding

$

131,549

 

$

114,710

 

$

344,255

 

$

287,003

Land sales and other

 

916

 

 

813

 

 

5,360

 

 

1,739

Total gross profit

$

132,465

 

$

115,523

 

$

349,615

 

$

288,742

Reconciliation of homebuilding gross profit and the related gross margin excluding impairments and abandonments and interest amortized to cost of sales to homebuilding gross profit and gross margin, the most directly comparable GAAP measure, is provided for each period discussed below. Management believes that this information assists investors in comparing the operating characteristics of homebuilding activities by eliminating many of the differences in companies' respective level of impairments and level of debt. These measures should not be considered alternative to homebuilding gross profit and gross margin determined in accordance with GAAP as an indicator of operating performance.

 

Three Months Ended June 30,

 

Nine Months Ended June 30,

in thousands

2022

 

2021

 

2022

 

2021

Homebuilding gross profit/margin

$

131,549

25.1

%

 

$

114,710

20.2

%

 

$

344,255

23.3

%

 

$

287,003

18.7

%

Inventory impairments and abandonments (I&A)

 

 

 

 

231

 

 

 

495

 

 

 

696

 

Homebuilding gross profit/margin excluding I&A

 

131,549

25.1

%

 

 

114,941

20.3

%

 

 

344,750

23.3

%

 

 

287,699

18.7

%

Interest amortized to cost of sales

 

15,679

 

 

 

22,529

 

 

 

46,542

 

 

 

65,199

 

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

$

147,228

28.1

%

 

$

137,470

24.2

%

 

$

391,292

26.5

%

 

$

352,898

22.9

%

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 June 30, (a)

in thousands

 

2022

 

 

 

2021

 

 

2022

 

 

2021

 

 

 

2022

 

 

2021

 

Net income

$

54,324

 

 

$

37,135

 

$

133,881

 

$

73,660

 

 

$

182,242

 

$

97,338

 

Expense from income taxes

 

13,152

 

 

 

10,801

 

 

29,683

 

 

22,587

 

 

 

28,597

 

 

31,351

 

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

 

15,679

 

 

 

22,529

 

 

46,542

 

 

65,452

 

 

 

68,380

 

 

96,179

 

Interest expense not qualified for capitalization

 

 

 

 

212

 

 

 

 

2,781

 

 

 

 

 

4,876

 

EBIT

 

83,155

 

 

 

70,677

 

 

210,106

 

 

164,480

 

 

 

279,219

 

 

229,744

 

Depreciation and amortization

 

3,189

 

 

 

3,689

 

 

9,101

 

 

10,494

 

 

 

12,583

 

 

15,300

 

EBITDA

 

86,344

 

 

 

74,366

 

 

219,207

 

 

174,974

 

 

 

291,802

 

 

245,044

 

Stock-based compensation expense

 

1,983

 

 

 

3,194

 

 

6,515

 

 

9,254

 

 

 

9,428

 

 

14,421

 

(Gain) loss on extinguishment of debt

 

(86

)

 

 

1,050

 

 

78

 

 

1,613

 

 

 

490

 

 

1,613

 

Inventory impairments and abandonments (b)

 

 

 

 

231

 

 

935

 

 

696

 

 

 

1,092

 

 

1,333

 

Restructuring and severance expenses

 

 

 

 

 

 

 

 

(10

)

 

 

 

 

(54

)

Litigation settlement in discontinued operations

 

 

 

 

 

 

 

 

120

 

 

 

 

 

1,380

 

Adjusted EBITDA

$

88,241

 

 

$

78,841

 

$

226,735

 

$

186,647

 

 

$

302,812

 

$

263,737

 

 

 

(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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