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Beazer Homes Reports Strong Second Quarter Fiscal 2021 Results

Beazer Homes USA, Inc. (NYSE: BZH) (www.beazer.com) today announced its financial results for the three and six months ended March 31, 2021.

“We had an extraordinary second 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 growth in sales pace, average sales price, gross margin and adjusted EBITDA, leading to a doubling in our quarterly net income versus last year. At the same time, we improved our balance sheet efficiency by increasing our share of lots controlled by options while continuing to reduce leverage.”

Commenting on fiscal 2021 full-year expectations, Mr. Merrill said, “With evidence of continued strength in new home demand and the enhanced visibility provided by a backlog that is up more than 50% in dollar value compared to last year, we now expect fiscal 2021 earnings per share to be above $3.00.”

Looking beyond fiscal 2021, Mr. Merrill concluded, “Our balanced growth strategy and commitment to expanding our already robust ESG program, has positioned us to generate further improvements in profitability and returns for shareholders in the years ahead, while creating durable and growing value for our customers, employees and partners as well.”

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

  • Net income from continuing operations of $24.6 million, compared to net income from continuing operations of $10.6 million in fiscal second quarter 2020
  • Adjusted EBITDA of $64.2 million, up 46.2%
  • Homebuilding revenue of $547.4 million, up 12.2% on a 3.2% increase in average selling price to $394.4 thousand and an 8.7% increase in home closings to 1,388
  • Homebuilding gross margin was 17.8%, up 170 basis points. Excluding impairments, abandonments and amortized interest, homebuilding gross margin was 22.2%, up 140 basis points
  • SG&A as a percentage of total revenue was 11.0%, down 100 basis points year-over-year
  • Net new orders of 1,854, up 11.6% on a 42.3% increase in orders/community/month to 4.7 and a 21.6% decrease in average community count to 131
  • Dollar value of backlog of $1,386.4 million, up 54.9%
  • Unrestricted cash at quarter end was $355.5 million; total liquidity was $605.5 million

The following provides additional details on the Company's performance during the fiscal second quarter 2021:

Profitability. Net income from continuing operations was $24.6 million, generating diluted earnings per share of $0.81. Second quarter adjusted EBITDA of $64.2 million was up $20.3 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 second quarter increased to 1,854, up 11.6% from the prior year, achieving the highest second quarter and the highest first half of the year level in more than a decade. The increase in net new orders was driven by a 42.3% increase in the absorption rate to 4.7 sales per community per month, up from 3.3 in the previous year, partially offset by a 21.6% decrease in average community count to 131. The cancellation rate for the quarter was 10.0%, an improvement of 580 basis points year-over-year.

Backlog. The dollar value of homes in backlog as of March 31, 2021 increased 54.9% to $1,386.4 million, representing 3,303 homes, compared to $895.0 million, representing 2,231 homes, at the same time last year. The average selling price of homes in backlog was $419.7 thousand, up 4.6% year-over-year.

Homebuilding Revenue. Second quarter homebuilding revenue was $547.4 million, up 12.2% year-over-year. The increase in homebuilding revenue was driven by an 8.7% increase in home closings to 1,388 homes and a 3.2% increase in the average selling price to $394.4 thousand.

Homebuilding Gross Margin. Homebuilding gross margin (excluding impairments, abandonments and amortized interest) was 22.2% for the second quarter, up 140 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 11.0% for the quarter, down 100 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 second quarter, the Company had approximately $605.5 million of available liquidity, including $355.5 million of unrestricted cash and a fully undrawn revolving credit facility capacity of $250.0 million.

Debt Repurchases. The Company repurchased $9.7 million of its outstanding 5.875% unsecured Senior Notes due October 2027 at an average price of $104.792 per $100 principal amount.

Commitment to Net Zero Energy Ready

In April 2021, we received the 2021 ENERGY STAR® Partner of the Year—Sustained Excellence Award from the U.S. Environmental Protection Agency and the U.S. Department of Energy for the sixth consecutive year. The Sustained Excellence Award represents the highest honor bestowed under the ENERGY STAR® program and underscores our commitment to improve energy efficiency. As described in our most recent proxy statement, in December 2020 we became the first national builder to publicly commit to ensuring every home we build is Net Zero Energy Ready by the end of 2025. We calculate the energy performance of our homes using the industry standard Home Energy Rating System (HERS), which measures energy efficiency on an easy to understand scale: the lower the number, the more energy efficient the home. Net Zero Energy Ready means that every home we build 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 by attaching a properly sized renewable energy system. Reaching our Net Zero Energy Ready target represents a significant improvement in energy efficiency and will lead to a reduction in greenhouse gas emissions.

Summary results for the three and six months ended March 31, 2021 are as follows:

 

Three Months Ended March 31,

 

2021

 

2020

 

Change*

New home orders, net of cancellations

1,854

 

 

1,661

 

 

11.6

%

Orders per community per month

4.7

 

 

3.3

 

 

42.3

%

Average active community count

131

 

 

167

 

 

(21.6

)%

Actual community count at quarter-end

132

 

 

166

 

 

(20.5

)%

Cancellation rates

10.0

%

 

15.8

%

 

-580 bps

 

 

 

 

 

 

Total home closings

1,388

 

 

1,277

 

 

8.7

%

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

$

394.4

 

 

$

382.1

 

 

3.2

%

Homebuilding revenue (in millions)

$

547.4

 

 

$

488.0

 

 

12.2

%

Homebuilding gross margin

17.8

%

 

16.1

%

 

170 bps

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

17.8

%

 

16.1

%

 

170 bps

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

22.2

%

 

20.8

%

 

140 bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

32.3

 

 

$

14.8

 

 

$

17.6

 

Expense from income taxes (in millions)

$

7.7

 

 

$

4.2

 

 

$

3.5

 

Income from continuing operations (in millions)

$

24.6

 

 

$

10.6

 

 

$

14.0

 

Basic income per share from continuing operations

$

0.82

 

 

$

0.36

 

 

$

0.46

 

Diluted income per share from continuing operations

$

0.81

 

 

$

0.35

 

 

$

0.46

 

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

32.3

 

 

$

14.8

 

 

$

17.6

 

Loss on debt extinguishment (in millions)

$

(0.6

)

 

$

 

 

$

(0.6

)

Income from continuing operations excluding loss on debt extinguishment before income taxes (in millions)(a)

$

32.9

 

 

$

14.8

 

 

$

18.1

 

Income from continuing operations excluding loss on debt extinguishment after income taxes (in millions)(b)

$

25.0

 

 

$

10.6

 

 

$

14.4

 

 

 

 

 

 

 

Net income

$

24.5

 

 

$

10.6

 

 

$

13.9

 

 

 

 

 

 

 

Land and land development spending (in millions)

$

97.3

 

 

$

123.0

 

 

$

(25.7

)

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

64.2

 

 

$

43.9

 

 

$

20.3

 

LTM Adjusted EBITDA (in millions)

$

238.9

 

 

$

194.0

 

 

$

44.9

*

 

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. 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 March 31, 2021, the loss on debt extinguishment was tax-effected at the effective tax rate of 24.2%. For the three months ended March 31, 2020, there was no loss on debt extinguishment.

 

"LTM" indicates amounts for the trailing 12 months.

 
 
 
 

 

Six Months Ended March 31,

 

2021

 

2020

 

Change*

New home orders, net of cancellations

3,296

 

 

2,912

 

 

13.2

%

LTM orders per community per month

3.8

 

 

2.9

 

 

31.0

%

Cancellation rates

11.0

%

 

15.4

%

 

-440 bps

 

 

 

 

 

 

Total home closings

2,502

 

 

2,389

 

 

4.7

%

ASP from closings (in thousands)

$

388.3

 

 

$

379.0

 

 

2.5

%

Homebuilding revenue (in millions)

$

971.6

 

 

$

905.4

 

 

7.3

%

Homebuilding gross margin

17.7

%

 

15.7

%

 

200 bps

Homebuilding gross margin, excluding I&A

17.8

%

 

15.7

%

 

210 bps

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

22.2

%

 

20.3

%

 

190 bps

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

48.5

 

 

$

17.4

 

 

$

31.1

 

Expense from income taxes (in millions)

$

11.8

 

 

$

4.0

 

 

$

7.9

 

Income from continuing operations (in millions)

$

36.7

 

 

$

13.4

 

 

$

23.3

 

Basic income per share from continuing operations

$

1.23

 

 

$

0.45

 

 

$

0.78

 

Diluted income per share from continuing operations

$

1.22

 

 

$

0.45

 

 

$

0.77

 

 

 

 

 

 

 

Income from continuing operations before income taxes (in millions)

$

48.5

 

 

$

17.4

 

 

$

31.1

 

Loss on debt extinguishment (in millions)

$

(0.6

)

 

$

 

 

$

(0.6

)

Inventory impairments and abandonments (in millions)

$

(0.5

)

 

$

 

 

$

(0.5

)

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

$

49.6

 

 

$

17.4

 

 

$

32.2

 

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

$

37.4

 

 

$

13.4

 

 

$

24.0

 

 

 

 

 

 

 

Net income

$

36.5

 

 

$

13.4

 

 

$

23.2

 

 

 

 

 

 

 

Land and land development spending (in millions)

$

206.9

 

 

$

269.0

 

 

$

(62.1

)

 

 

 

 

 

 

Adjusted EBITDA (in millions)

$

107.8

 

 

$

73.3

 

 

$

34.5

 

*

 

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 and level of impairments. 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 six months ended March 31, 2021, loss on debt extinguishment, and inventory impairments and abandonments were tax-effected at the effective tax rate of 24.2%. For the six months ended March 31, 2020, there were no loss on debt extinguishment, and inventory impairments and abandonments.

 

"LTM" indicates amounts for the trailing 12 months.

 
 

 

As of March 31,

 

2021

 

2020

 

Change

Backlog units

3,303

 

 

2,231

 

 

48.1

%

Dollar value of backlog (in millions)

$

1,386.4

 

 

$

895.0

 

 

54.9

%

ASP in backlog (in thousands)

$

419.7

 

 

$

401.2

 

 

4.6

%

Land and lots controlled

18,230

 

 

19,654

 

 

(7.2

)%

Conference Call

The Company will hold a conference call on April 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 May 6, 2021 at 800-839-8789 (for international callers, dial 203-369-3037) 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, 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 that are out of our control and affect the affordability of and demand for, the homes we sell; (iii) the potential negative impact 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 little or no control; (x) estimates related to homes to be delivered in the future (backlog) are imprecise, 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

 

Six Months Ended

 

March 31,

 

March 31,

 in thousands (except per share data)

2021

 

2020

 

2021

 

2020

Total revenue

$

549,889

 

 

$

489,413

 

 

$

978,428

 

 

$

907,217

 

Home construction and land sales expenses

451,963

 

 

410,568

 

 

804,744

 

 

765,235

 

Inventory impairments and abandonments

 

 

 

 

465

 

 

 

Gross profit

97,926

 

 

78,845

 

 

173,219

 

 

141,982

 

Commissions

20,884

 

 

18,744

 

 

37,391

 

 

34,809

 

General and administrative expenses

39,741

 

 

40,050

 

 

77,717

 

 

79,749

 

Depreciation and amortization

3,683

 

 

3,627

 

 

6,805

 

 

7,054

 

Operating income

33,618

 

 

16,424

 

 

51,306

 

 

20,370

 

Equity in income of unconsolidated entities

186

 

 

147

 

 

111

 

 

134

 

Loss on extinguishment of debt

(563

)

 

 

 

(563

)

 

 

Other expense, net

(894

)

 

(1,786

)

 

(2,346

)

 

(3,126

)

Income from continuing operations before income taxes

32,347

 

 

14,785

 

 

48,508

 

 

17,378

 

Expense from income taxes

7,704

 

 

4,170

 

 

11,829

 

 

3,959

 

Income from continuing operations

24,643

 

 

10,615

 

 

36,679

 

 

13,419

 

Loss from discontinued operations, net of tax

(115

)

 

(1

)

 

(154

)

 

(59

)

Net income

$

24,528

 

 

$

10,614

 

 

$

36,525

 

 

$

13,360

 

Weighted average number of shares:

 

 

 

 

 

 

 

Basic

29,953

 

 

29,868

 

 

29,862

 

 

29,808

 

Diluted

30,215

 

 

29,975

 

 

30,150

 

 

30,078

 

 

 

 

 

 

 

 

 

Basic income (loss) per share:

 

 

 

 

 

 

 

Continuing operations

$

0.82

 

 

$

0.36

 

 

$

1.23

 

 

$

0.45

 

Discontinued operations

 

 

 

 

(0.01

)

 

 

Total

$

0.82

 

 

$

0.36

 

 

$

1.22

 

 

$

0.45

 

Diluted income (loss) per share:

 

 

 

 

 

 

 

Continuing operations

$

0.81

 

 

$

0.35

 

 

$

1.22

 

 

$

0.45

 

Discontinued operations

 

 

 

 

(0.01

)

 

 

Total

$

0.81

 

 

$

0.35

 

 

$

1.21

 

 

$

0.45

 

 
 

 

Three Months Ended

 

Six Months Ended

 

March 31,

 

March 31,

Capitalized Interest in Inventory

2021

 

2020

 

2021

 

2020

Capitalized interest in inventory, beginning of period

$

119,148

 

 

$

137,010

 

 

$

119,659

 

 

$

136,565

 

Interest incurred

19,345

 

 

22,271

 

 

39,247

 

 

43,827

 

Interest expense not qualified for capitalization and included as other expense

(969

)

 

(1,928

)

 

(2,569

)

 

(3,370

)

Capitalized interest amortized to home construction and land sales expenses

(24,110

)

 

(22,660

)

 

(42,923

)

 

(42,329

)

Capitalized interest in inventory, end of period

$

113,414

 

 

$

134,693

 

 

$

113,414

 

 

$

134,693

 
 
 
 
 

BEAZER HOMES USA, INC.

CONDENSED CONSOLIDATED BALANCE SHEETS

(Unaudited)

 

in thousands (except share and per share data)

March 31, 2021

 

September 30, 2020

ASSETS

 

 

 

Cash and cash equivalents

$

355,533

 

 

$

327,693

 

Restricted cash

18,162

 

 

14,835

 

Accounts receivable (net of allowance of $298 and $358, respectively)

17,158

 

 

19,817

 

Income tax receivable

9,203

 

 

9,252

 

Owned inventory

1,383,616

 

 

1,350,738

 

Investments in unconsolidated entities

4,114

 

 

4,003

 

Deferred tax assets, net

213,624

 

 

225,143

 

Property and equipment, net

21,989

 

 

22,280

 

Operating lease right-of-use assets

12,719

 

 

13,103

 

Goodwill

11,376

 

 

11,376

 

Other assets

8,077

 

 

9,240

 

Total assets

$

2,055,571

 

 

$

2,007,480

 

LIABILITIES AND STOCKHOLDERS’ EQUITY

 

 

 

Trade accounts payable

$

150,632

 

 

$

132,192

 

Operating lease liabilities

14,603

 

 

15,333

 

Other liabilities

133,568

 

 

135,983

 

Total debt (net of debt issuance costs of $9,980 and $10,891, respectively)

1,123,001

 

 

1,130,801

 

Total liabilities

1,421,804

 

 

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, 31,289,296 issued and outstanding and 31,012,326 issued and outstanding, respectively)

31

 

 

31

 

Paid-in capital

860,537

 

 

856,466

 

Accumulated deficit

(226,801

)

 

(263,326

)

Total stockholders’ equity

633,767

 

 

593,171

 

Total liabilities and stockholders’ equity

$

2,055,571

 

 

$

2,007,480

 

 

 

 

 

Inventory Breakdown

 

 

 

Homes under construction

$

653,137

 

 

$

525,021

 

Development projects in progress

517,037

 

 

589,763

 

Land held for future development

23,068

 

 

28,531

 

Land held for sale

8,851

 

 

12,622

 

Capitalized interest

113,414

 

 

119,659

 

Model homes

68,109

 

 

75,142

 

Total owned inventory

$

1,383,616

 

 

$

1,350,738

 

 
 
 
 
 

BEAZER HOMES USA, INC.

CONSOLIDATED OPERATING AND FINANCIAL DATA – CONTINUING OPERATIONS

 

 

Three Months Ended March 31,

 

Six Months Ended March 31,

SELECTED OPERATING DATA

2021

 

2020

 

2021

 

2020

Closings:

 

 

 

 

 

 

 

West region

757 

 

 

735 

 

 

1,399 

 

 

1,429 

 

East region

321 

 

 

235 

 

 

544 

 

 

427 

 

Southeast region

310 

 

 

307 

 

 

559 

 

 

533 

 

Total closings

1,388 

 

 

1,277 

 

 

2,502 

 

 

2,389 

 

 

 

 

 

 

 

 

 

New orders, net of cancellations:

 

 

 

 

 

 

 

West region

1,116 

 

 

953 

 

 

1,898 

 

 

1,690 

 

East region

357 

 

 

351 

 

 

677 

 

 

584 

 

Southeast region

381 

 

 

357 

 

 

721 

 

 

638 

 

Total new orders, net

1,854 

 

 

1,661 

 

 

3,296 

 

 

2,912 

 

 
 

 

 

As of March 31,

Backlog units at end of period:

 

2021

 

2020

West region

 

1,864 

 

 

1,243 

 

East region

 

757 

 

 

498 

 

Southeast region

 

682 

 

 

490 

 

Total backlog units

 

3,303 

 

 

2,231 

 

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

 

$

1,386.4 

 

 

$

895.0 

 

 
 

in thousands

Three Months Ended March 31,

 

Six Months Ended March 31,

SUPPLEMENTAL FINANCIAL DATA

2021

 

2020

 

2021

 

2020

Homebuilding revenue:

 

 

 

 

 

 

 

West region

$

277,843 

 

 

$

267,231 

 

 

$

510,783 

 

 

$

521,629 

 

East region

151,993 

 

 

110,011 

 

 

249,957 

 

 

187,656 

 

Southeast region

117,581 

 

 

110,744 

 

 

210,906 

 

 

196,100 

 

Total homebuilding revenue

$

547,417 

 

 

$

487,986 

 

 

$

971,646 

 

 

$

905,385 

 

 

 

 

 

 

 

 

 

Revenue:

 

 

 

 

 

 

 

Homebuilding

$

547,417 

 

 

$

487,986 

 

 

$

971,646 

 

 

$

905,385 

 

Land sales and other

2,472 

 

 

1,427 

 

 

6,782 

 

 

1,832 

 

Total revenue

$

549,889 

 

 

$

489,413 

 

 

$

978,428 

 

 

$

907,217 

 

 

 

 

 

 

 

 

 

Gross profit:

 

 

 

 

 

 

 

Homebuilding

$

97,456 

 

 

$

78,744 

 

 

$

172,293 

 

 

$

141,852 

 

Land sales and other

470 

 

 

101 

 

 

926 

 

 

130 

 

Total gross profit

$

97,926 

 

 

$

78,845 

 

 

$

173,219 

 

 

$

141,982 

 

 
 
 
 

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 and level of debt.

 

Three Months Ended March 31,

 

Six Months Ended March 31,

in thousands

2021

 

2020

 

2021

 

2020

Homebuilding gross profit/margin

$

97,456

 

17.8

%

 

$

78,744

 

16.1

%

 

$

172,293

 

17.7

%

 

$

141,852

 

15.7

%

Inventory impairments and abandonments (I&A)

 

 

 

 

 

 

465

 

 

 

 

 

Homebuilding gross profit/margin before I&A

97,456

 

17.8

%

 

78,744

 

16.1

%

 

172,758

 

17.8

%

 

141,852

 

15.7

%

Interest amortized to cost of sales

24,110

 

 

 

22,660

 

 

 

42,670

 

 

 

42,329

 

 

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

$

121,566

 

22.2

%

 

$

101,404

 

20.8

%

 

$

215,428

 

22.2

%

 

$

184,181

 

20.3

%

 
 
 

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

in thousands

2021

 

2020

 

2021

 

2020

 

2021

 

2020

Net income

$

24,528

 

 

$

10,614

 

 

$

36,525

 

 

$

13,360

 

 

$

75,391

 

 

$

27,391

 

Expense from income taxes

7,672

 

 

4,170

 

 

11,786

 

 

3,942

 

 

25,508

 

 

8,789

 

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

24,110

 

 

22,660

 

 

42,923

 

 

42,329

 

 

96,256

 

 

101,496

 

Interest expense not qualified for capitalization

969

 

 

1,928

 

 

2,569

 

 

3,370

 

 

7,667

 

 

5,640

 

EBIT

57,279

 

 

39,372

 

 

93,803

 

 

63,001

 

 

204,822

 

 

143,316

 

Depreciation and amortization

3,683

 

 

3,627

 

 

6,805

 

 

7,054

 

 

15,391

 

 

16,143

 

EBITDA

60,962

 

 

42,999

 

 

100,608

 

 

70,055

 

 

220,213

 

 

159,459

 

Stock-based compensation expense

2,549

 

 

899

 

 

6,060

 

 

3,210

 

 

12,886

 

 

9,442

 

Loss on extinguishment of debt

563

 

 

 

 

563

 

 

 

 

563

 

 

25,136

 

Inventory impairments and abandonments (b)

 

 

 

 

465

 

 

 

 

2,576

 

 

 

Restructuring and severance expenses

 

 

 

 

(10

)

 

 

 

1,307

 

 

 

Litigation settlement in discontinued operations

120

 

 

 

 

$

120

 

 

$

 

 

1,380

 

 

 

Adjusted EBITDA

$

64,194

 

 

$

43,898

 

 

$

107,806

 

 

$

73,265

 

 

$

238,925

 

 

$

194,037

 

(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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