Financial News

Beazer Homes Reports Second Quarter Fiscal 2023 Results

Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three months ended March 31, 2023.

“Against a backdrop of improving homebuyer confidence and stabilizing interest rates, we generated strong second quarter results,” said Allan P. Merrill, the Company’s Chairman and Chief Executive Officer. “Revenue growth and careful management of overheads led to $62 million in Adjusted EBITDA and $1.13 of earnings per share.”

Commenting on current market conditions, Mr. Merrill said, “While home affordability remains quite challenging, homebuyers appear to be adjusting to a higher interest rate environment aided by both wage growth and moderating home prices. From a production perspective, supply chain issues are greatly improved, allowing us to decrease cycle times and pursue direct cost savings.”

Looking further out, Mr. Merrill concluded, “We remain confident in the multi-year growth 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. With a seasoned operating team, an ample supply of lots and a more efficient and less leveraged balance sheet, we remain confident that we will be able to create durable value for our stakeholders in the years ahead.”

Beazer Homes Fiscal Second Quarter 2023 Highlights and Comparison to Fiscal Second Quarter 2022

  • Net income from continuing operations of $34.7 million, or $1.13 per diluted share, compared to net income from continuing operations of $44.7 million, or $1.45 per diluted share, in fiscal second quarter 2022
  • Adjusted EBITDA of $62.1 million, down 19.7%
  • Homebuilding revenue of $542.0 million, up 6.9% on a 8.4% increase in average selling price to $509.9 thousand, partially offset by a 1.4% decrease in home closings to 1,063
  • Homebuilding gross margin was 18.7%, down 480 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 22.0%, down 480 basis points
  • SG&A as a percentage of total revenue was 11.2%, down 100 basis points
  • Net new orders of 1,181, down 8.5% on a 11.7% decrease in orders per community per month to 3.2, partially offset by a 3.6% increase in average community count to 123
  • Backlog dollar value of $987.2 million, down 37.7% on a 40.5% decrease in backlog units to 1,858, partially offset by a 4.7% increase in average selling price of homes in backlog to $531.3 thousand
  • Controlled lots of 23,820, up 1.3% from 23,516
  • Land acquisition and land development spending was $113.0 million, down 14.8% from $132.6 million
  • Unrestricted cash at quarter end was $240.8 million; total liquidity was $505.8 million

The following provides additional details on the Company's performance during the fiscal second quarter 2023:

Profitability. Net income from continuing operations was $34.7 million, generating diluted earnings per share of $1.13. This included the impact of energy efficiency tax credits of $5.6 million or $0.18 per share compared to $3.0 million of such credits or $0.10 per share in the prior year quarter. Second quarter adjusted EBITDA of $62.1 million was down $15.3 million, or 19.7%, primarily due to lower gross margin.

Orders. Net new orders for the second quarter were 1,181, down 8.5% from 1,291 in the prior year quarter, driven by a 11.7% decrease in sales pace to 3.2 orders per community per month, down from 3.6 in the prior year quarter.

Cancellations. The cancellation rate for the quarter was 18.6%, up from 12.2% in the prior year quarter. Although up year-over-year, the cancellation rate was well within our historical normal range and down sequentially from 37.1% in fiscal first quarter 2023, reflecting an improved sales environment.

Backlog. The dollar value of homes in backlog as of March 31, 2023 was $987.2 million, representing 1,858 homes, compared to $1.6 billion, representing 3,121 homes, at the same time last year. The average selling price of homes in backlog was $531.3 thousand, up 4.7% versus the prior year quarter.

Homebuilding Revenue. Second quarter homebuilding revenue was $542.0 million, up 6.9% year-over-year. The increase in homebuilding revenue was driven by an 8.4% increase in the average selling price to $509.9 thousand, which was offset by a 1.4% decrease in home closings to 1,063 homes.

Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 22.0% for the second quarter, down from 26.8% in the prior year quarter. Although down versus the prior year quarter, homebuilding gross margin was above second quarter historical averages and in line with expectations.

SG&A Expenses. Selling, general and administrative expenses as a percentage of total revenue was 11.2% for the quarter, down 100 basis points year-over-year as a result of the Company's continued focus on overhead cost management while benefiting from higher revenue driven by growth in average selling price. SG&A on an absolute dollar basis decreased by $1.0 million, or 1.6% year-over-year.

Land Position. Controlled lots increased 1.3% to 23,820, compared to 23,516 from the prior year quarter. Excluding land held for future development and land held for sale lots, active lots controlled were 23,091, up 1.6% year-over-year. Through the expansion of lot option agreements, 54.0% of total active lots, or 12,460 lots, were under option agreements compared to 50.8% of total active lots, or 11,551 lots, as of March 31, 2022.

Liquidity. At the close of the second quarter, the Company had $505.8 million of available liquidity, including $240.8 million of unrestricted cash and $265.0 million of remaining capacity under the unsecured revolving credit facility.

Debt Repurchases. Subsequent to the end of the quarter, the Company repurchased $5.0 million of its outstanding 6.750% unsecured Senior Notes due March 2025.

Commitment to ESG Initiatives

During the quarter, the Company was recognized for its continued leadership and commitment to advancing ESG.

In February, Beazer Homes earned the 2023 Top Workplaces USA award, issued by Energage, powered by 16 years of surveying data from more than 27 million employees across 70,000 organizations. Participating companies are measured on anonymous employee feedback comparing the survey’s research-based statements, including 15 Culture Drivers that are proven to predict high performance against industry benchmarks.

In March, the Company received the 2023 ENERGY STAR Partner of the Year Award with Sustained Excellence for the eighth consecutive year. This award highlights the Company’s dedication to continually enhancing the energy efficiency of its homes in support of its industry-first pledge that, by the end of 2025, every home the Company builds will be Net Zero Energy Ready with a gross HERS® index score of 45 or less.

Also in March, Beazer Homes was recognized on Newsweek’s list of America’s Most Trustworthy Companies 2023. This award identified companies based on an independent survey of approximately 25,000 U.S. residents who rated companies they knew from the perspective of customers, investors and employees.

Summary results for the three and six months ended March 31, 2023 are as follows:

 

Three Months Ended March 31,

 

 

2023

 

 

 

2022

 

 

Change*

New home orders, net of cancellations

 

1,181

 

 

 

1,291

 

 

(8.5

)%

Orders per community per month

 

3.2

 

 

 

3.6

 

 

(11.7

)%

Average active community count

 

123

 

 

 

119

 

 

3.6

%

Active community count at quarter-end

 

121

 

 

 

119

 

 

1.7

%

Cancellation rates

 

18.6

%

 

 

12.2

%

 

640 bps

 

 

 

 

 

 

Total home closings

 

1,063

 

 

 

1,078

 

 

(1.4

)%

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

$

509.9

 

 

$

470.5

 

 

8.4

%

Homebuilding revenue (in millions)

$

542.0

 

 

$

507.2

 

 

6.9

%

Homebuilding gross margin

 

18.7

%

 

 

23.5

%

 

(480) bps

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

 

18.8

%

 

 

23.6

%

 

(480) bps

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

 

22.0

%

 

 

26.8

%

 

(480) bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

39.8

 

 

$

54.8

 

 

(27.3

)%

Expense from income taxes (in millions)

$

5.1

 

 

$

10.1

 

 

(49.4

)%

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

$

34.7

 

 

$

44.7

 

 

(22.3

)%

Basic income per share from continuing operations

$

1.14

 

 

$

1.46

 

 

(21.9

)%

Diluted income per share from continuing operations

$

1.13

 

 

$

1.45

 

 

(22.1

)%

 

 

 

 

 

 

 

 

 

 

 

 

Net income (in millions)

$

34.7

 

 

$

44.7

 

 

(22.3

)%

 

 

 

 

 

 

Land acquisition and land development spending (in millions)

$

113.0

 

 

$

132.6

 

 

(14.8

)%

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

62.1

 

 

$

77.4

 

 

(19.7

)%

LTM Adjusted EBITDA (in millions)

$

340.9

 

 

$

293.4

 

 

16.2

%

* Change and totals are calculated using unrounded numbers.

"LTM" indicates amounts for the trailing 12 months.

 

Six Months Ended March 31,

 

 

2023

 

 

 

2022

 

 

Change*

New home orders, net of cancellations

 

1,663

 

 

 

2,432

 

 

(31.6

)%

LTM orders per community per month

 

2.2

 

 

 

3.3

 

 

(33.3

)%

Cancellation rates

 

25.0

%

 

 

12.0

%

 

1,300 bps

 

 

 

 

 

 

Total home closings

 

1,896

 

 

 

2,097

 

 

(9.6

)%

ASP from closings (in thousands)

$

520.1

 

 

$

454.9

 

 

14.3

%

Homebuilding revenue (in millions)

$

986.1

 

 

$

953.9

 

 

3.4

%

Homebuilding gross margin

 

18.9

%

 

 

22.3

%

 

(340) bps

Homebuilding gross margin, excluding I&A

 

19.0

%

 

 

22.3

%

 

(330) bps

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

 

22.1

%

 

 

25.6

%

 

(350) bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

68.4

 

 

$

96.1

 

 

(28.9

)%

Expense from income taxes (in millions)

$

9.2

 

 

$

16.5

 

 

(44.1

)%

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

$

59.1

 

 

$

79.6

 

 

(25.7

)%

Basic income per share from continuing operations

$

1.94

 

 

$

2.61

 

 

(25.7

)%

Diluted income per share from continuing operations

$

1.93

 

 

$

2.59

 

 

(25.5

)%

 

 

 

 

 

 

Net income (in millions)

$

59.0

 

 

$

79.6

 

 

(25.8

)%

 

 

 

 

 

 

Land acquisition and land development spending (in millions)

$

227.7

 

 

$

263.3

 

 

(13.5

)%

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

109.3

 

 

$

138.5

 

 

(21.1

)%

* Change and totals are calculated using unrounded numbers.

"LTM" indicates amounts for the trailing 12 months.

 

As of March 31,

 

 

2023

 

 

2022

 

Change

Backlog units

 

1,858

 

 

3,121

 

(40.5

)%

Dollar value of backlog (in millions)

$

987.2

 

$

1,583.5

 

(37.7

)%

ASP in backlog (in thousands)

$

531.3

 

$

507.4

 

4.7

%

Land and lots controlled

 

23,820

 

 

23,516

 

1.3

%

Conference Call

The Company will hold a conference call on April 27, 2023 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 630-395-0227). 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 May 4, 2023 at 866-378-0632 (for international callers, dial 203-369-0313) 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:

  • the cyclical nature of the homebuilding industry and further deterioration in homebuilding industry conditions;
  • 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;
  • 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;
  • continued supply chain challenges negatively impacting our homebuilding production, including shortages of raw materials and other critical components such as windows, doors, and appliances;
  • continued shortages of or increased costs for labor used in housing production, and the level of quality and craftsmanship provided by such labor;
  • 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;
  • financial institution disruptions, such as recent bank failures;
  • 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 agreement abandonments;
  • factors affecting margins, such as adjustments to home pricing, increased sales incentives and mortgage rate buy down programs in order to remain competitive; 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 cycle times and production and overhead cost structures; not being able to pass on cost increases (including cost increases due to increasing the energy efficiency of our homes) through pricing increases;
  • 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;
  • our ability to raise debt and/or equity capital, due to factors such as limitations in the capital markets (including market volatility), adverse credit market conditions and financial institution disruptions, 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;
  • market perceptions regarding any capital raising initiatives we may undertake (including future issuances of equity or debt capital);
  • changes in tax laws or otherwise regarding the deductibility of mortgage interest expenses and real estate taxes;
  • increased competition or delays in reacting to changing consumer preferences in home design;
  • 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;
  • the potential recoverability of our deferred tax assets;
  • increases in corporate tax rates;
  • 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;
  • the results of litigation or government proceedings and fulfillment of any related obligations;
  • the impact of construction defect and home warranty claims;
  • the cost and availability of insurance and surety bonds, as well as the sufficiency of these instruments to cover potential losses incurred;
  • the impact of information technology failures, cybersecurity issues or data security breaches;
  • the impact of governmental regulations on homebuilding in key markets, such as regulations limiting the availability of water and electricity (including availability of electrical equipment such as transformers and meters);
  • the success of our ESG initiatives, including our ability to meet our goal that by 2025 every home we build will be Net Zero Energy Ready, 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
  • 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

 

Six Months Ended

 

March 31,

 

March 31,

in thousands (except per share data)

 

2023

 

 

2022

 

 

 

2023

 

 

 

2022

 

Total revenue

$

543,908

 

$

508,506

 

 

$

988,836

 

 

$

962,655

 

Home construction and land sales expenses

 

440,901

 

 

387,821

 

 

 

799,871

 

 

 

744,570

 

Inventory impairments and abandonments

 

111

 

 

935

 

 

 

301

 

 

 

935

 

Gross profit

 

102,896

 

 

119,750

 

 

 

188,664

 

 

 

217,150

 

Commissions

 

18,305

 

 

16,578

 

 

 

32,410

 

 

 

32,391

 

General and administrative expenses

 

42,779

 

 

45,530

 

 

 

83,427

 

 

 

83,297

 

Depreciation and amortization

 

3,020

 

 

3,031

 

 

 

5,533

 

 

 

5,912

 

Operating income

 

38,792

 

 

54,611

 

 

 

67,294

 

 

 

95,550

 

Loss on extinguishment of debt, net

 

 

 

(164

)

 

 

(515

)

 

 

(164

)

Other income, net

 

1,007

 

 

303

 

 

 

1,583

 

 

 

722

 

Income from continuing operations before income taxes

 

39,799

 

 

54,750

 

 

 

68,362

 

 

 

96,108

 

Expense from income taxes

 

5,092

 

 

10,072

 

 

 

9,247

 

 

 

16,535

 

Income from continuing operations

 

34,707

 

 

44,678

 

 

 

59,115

 

 

 

79,573

 

Loss from discontinued operations, net of tax

 

 

 

(6

)

 

 

(77

)

 

 

(16

)

Net income

$

34,707

 

$

44,672

 

 

$

59,038

 

 

$

79,557

 

Weighted-average number of shares:

 

 

 

 

 

 

 

Basic

 

30,394

 

 

30,594

 

 

 

30,464

 

 

 

30,464

 

Diluted

 

30,610

 

 

30,823

 

 

 

30,702

 

 

 

30,772

 

 

 

 

 

 

 

 

 

Basic income per share:

 

 

 

 

 

 

 

Continuing operations

$

1.14

 

$

1.46

 

 

$

1.94

 

 

$

2.61

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

Total

$

1.14

 

$

1.46

 

 

$

1.94

 

 

$

2.61

 

Diluted income per share:

 

 

 

 

 

 

 

Continuing operations

$

1.13

 

$

1.45

 

 

$

1.93

 

 

$

2.59

 

Discontinued operations

 

 

 

 

 

 

 

 

 

 

Total

$

1.13

 

$

1.45

 

 

$

1.93

 

 

$

2.59

 

 

Three Months Ended

 

Six Months Ended

 

March 31,

 

March 31,

Capitalized Interest in Inventory

 

2023

 

 

 

2022

 

 

 

2023

 

 

 

2022

 

Capitalized interest in inventory, beginning of period

$

113,143

 

 

$

110,516

 

 

$

109,088

 

 

$

106,985

 

Interest incurred

 

18,034

 

 

 

18,253

 

 

 

35,864

 

 

 

36,564

 

Interest expense not qualified for capitalization and included as other expense

 

 

 

 

 

 

 

 

 

 

 

Capitalized interest amortized to home construction and land sales expenses

 

(17,291

)

 

 

(16,083

)

 

 

(31,066

)

 

 

(30,863

)

Capitalized interest in inventory, end of period

$

113,886

 

 

$

112,686

 

 

$

113,886

 

 

$

112,686

 

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

in thousands (except share and per share data)

March 31, 2023

 

September 30, 2022

ASSETS

 

 

 

Cash and cash equivalents

$

240,829

 

$

214,594

Restricted cash

 

38,321

 

 

37,234

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

 

28,461

 

 

35,890

Income tax receivable

 

307

 

 

9,606

Owned inventory

 

1,741,956

 

 

1,737,865

Deferred tax assets, net

 

147,598

 

 

156,358

Property and equipment, net

 

25,540

 

 

24,566

Operating lease right-of-use assets

 

15,101

 

 

9,795

Goodwill

 

11,376

 

 

11,376

Other assets

 

18,607

 

 

14,679

Total assets

$

2,268,096

 

$

2,251,963

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Trade accounts payable

$

125,240

 

$

143,641

Operating lease liabilities

 

16,674

 

 

11,208

Other liabilities

 

141,977

 

 

174,388

Total debt (net of debt issuance costs of $6,533 and $7,280, respectively)

 

985,220

 

 

983,440

Total liabilities

 

1,269,111

 

 

1,312,677

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, 31,347,050 issued and outstanding and 30,880,138 issued and outstanding, respectively)

 

31

 

 

31

Paid-in capital

 

860,517

 

 

859,856

Retained earnings

 

138,437

 

 

79,399

Total stockholders’ equity

 

998,985

 

 

939,286

Total liabilities and stockholders’ equity

$

2,268,096

 

$

2,251,963

 

 

 

 

Inventory Breakdown

 

 

 

Homes under construction

$

724,193

 

$

785,742

Land under development

 

774,994

 

 

731,190

Land held for future development

 

19,879

 

 

19,879

Land held for sale

 

20,253

 

 

15,674

Capitalized interest

 

113,886

 

 

109,088

Model homes

 

88,751

 

 

76,292

Total owned inventory

$

1,741,956

 

$

1,737,865

BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS

 

 

Three Months Ended March 31,

 

Six Months Ended March 31,

SELECTED OPERATING DATA

2023

 

2022

 

2023

 

2022

Closings:

 

 

 

 

 

 

 

West region

631

 

665

 

1,141

 

1,268

East region

236

 

252

 

391

 

497

Southeast region

196

 

161

 

364

 

332

Total closings

1,063

 

1,078

 

1,896

 

2,097

 

 

 

 

 

 

 

 

New orders, net of cancellations:

 

 

 

 

 

 

 

West region

631

 

832

 

879

 

1,487

East region

296

 

284

 

416

 

520

Southeast region

254

 

175

 

368

 

425

Total new orders, net

1,181

 

1,291

 

1,663

 

2,432

 

As of March 31,

Backlog units:

 

2023

 

 

2022

West region

 

995

 

 

1,872

East region

 

435

 

 

634

Southeast region

 

428

 

 

615

Total backlog units

 

1,858

 

 

3,121

Aggregate dollar value of homes in backlog (in millions)

$

987.2

 

$

1,583.5

ASP in backlog (in thousands)

$

531.3

 

$

507.4

in thousands

Three Months Ended March 31,

 

Six Months Ended March 31,

SUPPLEMENTAL FINANCIAL DATA

 

2023

 

 

2022

 

 

2023

 

 

2022

Homebuilding revenue:

 

 

 

 

 

 

 

West region

$

328,961

 

$

302,887

 

$

603,283

 

$

559,379

East region

 

119,869

 

 

128,424

 

 

205,900

 

 

242,711

Southeast region

 

93,177

 

 

75,897

 

 

176,908

 

 

151,847

Total homebuilding revenue

$

542,007

 

$

507,208

 

$

986,091

 

$

953,937

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Homebuilding

$

542,007

 

$

507,208

 

$

986,091

 

$

953,937

Land sales and other

 

1,901

 

 

1,298

 

 

2,745

 

 

8,718

Total revenue

$

543,908

 

$

508,506

 

$

988,836

 

$

962,655

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

Homebuilding

$

101,588

 

$

119,402

 

$

186,702

 

$

212,706

Land sales and other

 

1,308

 

 

348

 

 

1,962

 

 

4,444

Total gross profit

$

102,896

 

$

119,750

 

$

188,664

 

$

217,150

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 March 31,

 

Six Months Ended March 31,

in thousands

2023

 

 

2022

 

 

2023

 

 

2022

 

Homebuilding gross profit/margin

$

101,588

18.7

%

 

$

119,402

23.5

%

 

$

186,702

18.9

%

 

$

212,706

22.3

%

Inventory impairments and abandonments (I&A)

 

111

 

 

 

495

 

 

 

301

 

 

 

495

 

Homebuilding gross profit/margin excluding I&A

 

101,699

18.8

%

 

 

119,897

23.6

%

 

 

187,003

19.0

%

 

 

213,201

22.3

%

Interest amortized to cost of sales

 

17,291

 

 

 

16,083

 

 

 

31,066

 

 

 

30,863

 

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

$

118,990

22.0

%

 

$

135,980

26.8

%

 

$

218,069

22.1

%

 

$

244,064

25.6

%

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 March 31,

 

Six Months Ended March 31,

 

LTM Ended March 31, (a)

in thousands

 

2023

 

 

2022

 

 

2023

 

 

2022

 

 

2023

 

 

2022

Net income

$

34,707

 

$

44,672

 

$

59,038

 

$

79,557

 

$

200,185

 

$

165,053

Expense from income taxes

 

5,092

 

 

10,071

 

 

9,225

 

 

16,531

 

 

45,961

 

 

26,246

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

 

17,291

 

 

16,083

 

 

31,066

 

 

30,863

 

 

72,261

 

 

75,230

Interest expense not qualified for capitalization

 

 

 

 

 

 

 

 

 

 

 

212

EBIT

 

57,090

 

 

70,826

 

 

99,329

 

 

126,951

 

 

318,407

 

 

266,741

Depreciation and amortization

 

3,020

 

 

3,031

 

 

5,533

 

 

5,912

 

 

12,981

 

 

13,083

EBITDA

 

60,110

 

 

73,857

 

 

104,862

 

 

132,863

 

 

331,388

 

 

279,824

Stock-based compensation expense

 

1,678

 

 

2,424

 

 

3,258

 

 

4,532

 

 

7,204

 

 

10,639

Loss on extinguishment of debt

 

 

 

164

 

 

515

 

 

164

 

 

42

 

 

1,626

Inventory impairments and abandonments(b)

 

111

 

 

935

 

 

301

 

 

935

 

 

1,890

 

 

1,323

Severance expenses

 

224

 

 

 

 

335

 

 

 

 

335

 

 

Adjusted EBITDA

$

62,123

 

$

77,380

 

$

109,271

 

$

138,494

 

$

340,859

 

$

293,412

(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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