Beazer Homes USA Inc. (BZH, Financial) filed Quarterly Report for the period ended 2010-06-30.
Beazer Homes Usa Inc. has a market cap of $317.4 million; its shares were traded at around $4.25 with and P/S ratio of 0.3. BZH is in the portfolios of John Paulson of Paulson & Co..
Gross Profit (Loss). Our gross margin improved for three months ended June 30, 2010 to 11.8% (13.3% without impairments and abandonments) compared to gross margin of 2.6% (7.9% without impairments and abandonments) for the comparable period of the prior year. Gross margin for the three months ended June 30, 2010 benefited from a reduction in non-cash pre-tax inventory impairments and option contract abandonments from $11.8 million in the three months ended June 30, 2009 to $5.1 million for the three months ended June 30, 2010, as well as from cost reductions related to our cost control initiatives including renegotiated vendor pricing where possible. Gross margins for nine months ended June 30, 2010 and 2009 were 11.3% and -0.7%, respectively. Gross margins for the nine months ended June 30, 2010 benefited from a reduction in non-cash pre-tax inventory impairments and option contract abandonments and certain non-recurring recoveries of certain warranty and product liability expenditures. Excluding year-to-date non-cash, pre-tax inventory impairment and abandonment charges of $24.0 million in fiscal 2010 and $67.1 million in fiscal 2009, gross margins were 14.5% and 10.0% for the nine months ended June 30, 2010 and 2009, respectively. Although we believe that we will continue to experience quarterly volatility in our gross margins, we do expect that our gross margin for fiscal 2010 will be higher than the full year gross margin achieved in fiscal 2009.
In our continued efforts to redeploy assets to more profitable endeavors, we executed a few land sales in the nine months ended June 30, 2010. Gross profit from land sales and other activities was $0.4 million and $2.7 million for the three and nine months ended June 30, 2010 compared to $71,000 and $56,000 for the three and nine months ended June 30, 2009. The $2.7 million year-to-date gross profit in fiscal 2010 includes $1.4 million related to a project sold in fiscal 2008 for which we completed our development responsibilities and obtained a final release during last quarter.
Depreciation and Amortization. Depreciation and amortization (D&A) totaled $3.6 million and $9.8 million for the three and nine months ended June 30, 2010. D&A totaled $5.0 million and $12.9 million for the three and nine months ended June 30, 2009, respectively.
Joint Venture Impairment Charges. During the three months ended June 30, 2010, we determined that our investment in two of our joint ventures was impaired and recorded impairments totaling $12.5 million related to these joint ventures. Impairments of investments in our unconsolidated joint ventures totaled $24.0 million for the nine months ended June 30, 2010, of which $2.7 million related to one of our exit markets and is reported in income from discontinued operations, net of tax (see Note 3 to the unaudited condensed consolidated financial statements where fiscal 2010 impairments are further discussed). Impairments of investments in our unconsolidated joint ventures in our continuing operations totaled $4.2 million and $13.8 million for the three and nine months ended June 30, 2009. As of June 30, 2010, our total investment in unconsolidated joint ventures was $8.7 million which could potentially be impaired in the future if market conditions worsen.
Discontinued Operations. During fiscal 2009, all of the homebuilding operating activities in the markets we have exited have ceased. On February 1, 2008, we determined that we would discontinue our mortgage origination services through Beazer Mortgage Corporation (BMC). As of September 30, 2008, all of BMC operating activities had ceased. We have classified the results of operations of BMC and our exit markets, as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented. All statement of operations information in the table above and the related management discussion and analysis exclude the results of discontinued operations. Total revenue from discontinued operations was $0.2 million and $0.6 million for the three months ended June 30, 2010 and 2009, respectively and $0.9 million and $16.5 million for the nine months ended June 30, 2010 and 2009, respectively. Additional operating data related to discontinued operations for the three and nine months ended June 30, 2010 and 2009 is as follows ($ in thousands):
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Beazer Homes Usa Inc. has a market cap of $317.4 million; its shares were traded at around $4.25 with and P/S ratio of 0.3. BZH is in the portfolios of John Paulson of Paulson & Co..
Highlight of Business Operations:
During the quarter ended June 30, 2010, we completed a series of capital raising transactions. Specifically, we issued 12.5 million shares of common stock, 3 million 7.25% tangible equity units and $300 million in senior unsecured notes due 2018. We also redeemed in full our outstanding 8 3/8 senior notes due 2012 and our convertible senior notes due 2024. Combined, these transactions raised approximately $437 million of additional capital and reduced our total debt by $142.4 million. These transactions followed successful capital raising transactions in prior quarters of fiscal 2010, where we issued $57.5 million of 7.5% Mandatory Convertible Subordinated Notes and 22,425,000 shares of common stock, redeemed in full of our outstanding 8 5/8% senior notes due 2011, and completed a partial exchange of $75 million of our Junior Subordinated Notes due 2036 (see Notes 6 and 7 to the unaudited condensed consolidated financial statements), for which we recorded a gain of $53.6 million. As a result, our stockholders equity increased from $196.6 million as of September 30, 2009 to $454.7 million as of June 30, 2010. Tangible Net Worth (stockholders equity less certain intangible assets, as defined in our Senior Notes indentures) also increased by $267.6 million to $404.6 million at June 30, 2010.Gross Profit (Loss). Our gross margin improved for three months ended June 30, 2010 to 11.8% (13.3% without impairments and abandonments) compared to gross margin of 2.6% (7.9% without impairments and abandonments) for the comparable period of the prior year. Gross margin for the three months ended June 30, 2010 benefited from a reduction in non-cash pre-tax inventory impairments and option contract abandonments from $11.8 million in the three months ended June 30, 2009 to $5.1 million for the three months ended June 30, 2010, as well as from cost reductions related to our cost control initiatives including renegotiated vendor pricing where possible. Gross margins for nine months ended June 30, 2010 and 2009 were 11.3% and -0.7%, respectively. Gross margins for the nine months ended June 30, 2010 benefited from a reduction in non-cash pre-tax inventory impairments and option contract abandonments and certain non-recurring recoveries of certain warranty and product liability expenditures. Excluding year-to-date non-cash, pre-tax inventory impairment and abandonment charges of $24.0 million in fiscal 2010 and $67.1 million in fiscal 2009, gross margins were 14.5% and 10.0% for the nine months ended June 30, 2010 and 2009, respectively. Although we believe that we will continue to experience quarterly volatility in our gross margins, we do expect that our gross margin for fiscal 2010 will be higher than the full year gross margin achieved in fiscal 2009.
In our continued efforts to redeploy assets to more profitable endeavors, we executed a few land sales in the nine months ended June 30, 2010. Gross profit from land sales and other activities was $0.4 million and $2.7 million for the three and nine months ended June 30, 2010 compared to $71,000 and $56,000 for the three and nine months ended June 30, 2009. The $2.7 million year-to-date gross profit in fiscal 2010 includes $1.4 million related to a project sold in fiscal 2008 for which we completed our development responsibilities and obtained a final release during last quarter.
Depreciation and Amortization. Depreciation and amortization (D&A) totaled $3.6 million and $9.8 million for the three and nine months ended June 30, 2010. D&A totaled $5.0 million and $12.9 million for the three and nine months ended June 30, 2009, respectively.
Joint Venture Impairment Charges. During the three months ended June 30, 2010, we determined that our investment in two of our joint ventures was impaired and recorded impairments totaling $12.5 million related to these joint ventures. Impairments of investments in our unconsolidated joint ventures totaled $24.0 million for the nine months ended June 30, 2010, of which $2.7 million related to one of our exit markets and is reported in income from discontinued operations, net of tax (see Note 3 to the unaudited condensed consolidated financial statements where fiscal 2010 impairments are further discussed). Impairments of investments in our unconsolidated joint ventures in our continuing operations totaled $4.2 million and $13.8 million for the three and nine months ended June 30, 2009. As of June 30, 2010, our total investment in unconsolidated joint ventures was $8.7 million which could potentially be impaired in the future if market conditions worsen.
Discontinued Operations. During fiscal 2009, all of the homebuilding operating activities in the markets we have exited have ceased. On February 1, 2008, we determined that we would discontinue our mortgage origination services through Beazer Mortgage Corporation (BMC). As of September 30, 2008, all of BMC operating activities had ceased. We have classified the results of operations of BMC and our exit markets, as discontinued operations in the accompanying unaudited condensed consolidated statements of operations for all periods presented. All statement of operations information in the table above and the related management discussion and analysis exclude the results of discontinued operations. Total revenue from discontinued operations was $0.2 million and $0.6 million for the three months ended June 30, 2010 and 2009, respectively and $0.9 million and $16.5 million for the nine months ended June 30, 2010 and 2009, respectively. Additional operating data related to discontinued operations for the three and nine months ended June 30, 2010 and 2009 is as follows ($ in thousands):
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