Financial Data and Key Metrics Changes - The company reported adjusted EBITDA of $38.8 million and earnings per diluted share of $0.42 for the second quarter [4] - The company repurchased over $20 million of stock, totaling $42 million in repurchases over the past three years [4][5] - The second quarter was characterized by a slower than anticipated selling environment due to affordability challenges and weakening consumer sentiment [4][5] Business Line Data and Key Metrics Changes - The company ended the second quarter with 162 communities, a nearly 12% increase year-over-year, and expects to finish the year with a community count in the 170s [14] - The average selling price (ASP) for homes is projected to be around $525,000 for the third quarter, driven by product and community mix shifts [19] - Adjusted gross margin for the full year is expected to be around 18.5%, reflecting better margins on recent spec sales and new communities [21] Market Data and Key Metrics Changes - The company anticipates a sales pace of 2.25 to 2.5 homes per month for the full year, which is below historical norms [21] - The company expects to close between 1,050 and 1,100 homes in the third quarter [19] - Total liquidity exceeded $375 million at the end of the quarter, with no debt maturities until October 2027 [22] Company Strategy and Development Direction - The company is shifting its capital allocation priorities to balance growth, deleveraging, and share repurchases due to the current macro environment and share price [8][25] - The company aims to achieve a double-digit compound annual growth rate in book value per share from the end of the last fiscal year through fiscal 2027 [15] - The company plans to temper the rate of land spending while accommodating meaningful share repurchases without sacrificing growth [14][15] Management's Comments on Operating Environment and Future Outlook - Management expressed that the current affordability challenges are expected to persist, and they are planning accordingly [31] - The company remains optimistic about the fundamentals for new homes and believes that pulling back too sharply on growth would be shortsighted [10] - Management highlighted that they are confident in their land positions and the value of their assets, which supports their share repurchase strategy [48] Other Important Information - The company has received board authorization to repurchase up to $100 million of its stock, representing nearly 20% of its current market cap [9] - The company is focused on improving overhead leverage by tightly controlling spending to reflect current market conditions [20] Q&A Session Summary Question: How does the affordability challenge impact updated multi-year goals? - Management acknowledged the ongoing affordability constraints and indicated that the longer timeline for community count provides more choices and discretion over capital deployment [31] Question: What drives the new goal regarding book value per share? - Management clarified that the new goal reflects earnings growth and anticipated benefits from share repurchases, with a consistent growth rate of over 17% in book value per share over the last five years [34][35] Question: What is the expected cadence of share repurchases? - Management indicated that the pace of repurchases will depend on market conditions, land opportunities, and share price, emphasizing their history of being good capital allocators [37][38] Question: What is the outlook for sales pace in the upcoming months? - Management noted that they expect a seasonal ramp in sales pace, with a larger community count contributing to improved year-over-year comparisons [42][44] Question: How does the company view labor market availability and input costs? - Management observed that labor availability is improving, which could serve as a tailwind for gross margins, while input costs remain uncertain due to external factors [75][76] Question: Will the company consider renegotiating land deals? - Management expressed that they are open to renegotiating terms on land deals and have the discretion to walk away from unfavorable agreements [67] Question: Can the company maintain premium pricing for energy-efficient homes? - Management is optimistic about maintaining premium pricing for their zero energy ready homes, citing better margins compared to non-energy efficient homes [68]

Financial Performance - In Q2 fiscal 2025, the company reported revenue of $565.3 million, an increase from $541.5 million in Q2 fiscal 2024, representing a growth of 4.4%[106] - Net income for Q1 2025 was $12,778, down 32.6% from $39,171 in Q1 2024[108] - Adjusted EBITDA for Q1 2025 was $38,813, a decrease of 33.9% compared to $58,776 in Q1 2024[108] - Homebuilding revenue for the three months ended March 31, 2025, increased by 3.2% to $556.0 million compared to $538.6 million in 2024, driven by a 3.4% increase in closings[121] - For the six months ended March 31, 2025, total homebuilding revenue increased by 10.5% to $1,016.5 million compared to $919.6 million in 2024[121] Margins and Profitability - The homebuilding gross margin for Q2 fiscal 2025 was 15.1%, down from 18.7% in Q2 fiscal 2024, reflecting increased price concessions and changes in product mix[105] - The total homebuilding gross profit for the three months ended March 31, 2025, was $84.1 million, with a gross margin of 15.1%[130] - Homebuilding gross profit decreased by $16.6 million to $84.1 million for the three months ended March 31, 2025, compared to $100.8 million in the prior year quarter, with a gross margin decrease of 360 basis points to 15.1%[133] - For the six months ended March 31, 2025, homebuilding gross profit decreased by $22.6 million to $154.1 million from $176.7 million in the prior year period, with a gross margin decrease of 400 basis points to 15.2%[137] Orders and Sales - Orders per community per month decreased to 2.3 in Q2 fiscal 2025, down from 3.1 in the prior year quarter, reflecting weaker consumer sentiment[105] - Net new orders for Q1 2025 decreased to 1,098, down 15.5% from 1,299 in Q1 2024, driven by a 27.1% decrease in sales pace[111] - For the six months ended March 31, 2025, net new orders decreased to 2,030, down 4.3% from 2,122 in the same period of 2024[112] - The backlog average selling price for homes sold in Q2 fiscal 2025 was $544.9 thousand, an increase of 3.7% from $525.5 thousand in the prior year quarter[105] Share Repurchase and Capital Management - The company repurchased $20.6 million worth of shares in Q2 fiscal 2025, totaling $41.7 million in share repurchases over the past three years[100] - The company plans to repurchase up to $100 million of outstanding common stock over multiple years, as approved by the Board of Directors[101] - As of March 31, 2025, the remaining availability of the share repurchase program was $8.3 million, following the repurchase of shares under a previously authorized program of $50.0 million[188] - In April 2025, the Company's Board of Directors approved a new share repurchase program authorizing the repurchase of up to $100.0 million of its outstanding common stock, replacing the prior program[174] Debt and Liquidity - Total debt as of March 31, 2025, increased to $1,082,231 from $1,023,311 as of March 31, 2024, maintaining a total debt to total capitalization ratio of 46.8%[110] - As of March 31, 2025, the liquidity position included $85.1 million in cash and cash equivalents and $292.6 million of remaining capacity under the Unsecured Facility[165] - Net cash used in operating activities was $155.9 million for the six months ended March 31, 2025, primarily driven by an increase in inventory of $191.0 million[159] Operational Efficiency - The average active community count increased by 15.9% year-over-year to 163 communities as of March 31, 2025[103] - The company aims to achieve a double-digit compound annual growth in book value per share from the end of fiscal 2024 through fiscal 2027[103] - The company noted that the decrease in backlog units was primarily due to fewer backlog units at the beginning of the fiscal quarter and year-over-year growth in closings outpacing growth in net new orders[119] Segment Performance - The West segment reported a 5.9% increase in homebuilding revenue for the three months ended March 31, 2025, totaling $365.1 million, with a 6.0% increase in closings[122] - The East segment experienced a 7.9% increase in homebuilding revenue for the same period, reaching $120.4 million, supported by a 7.0% increase in closings[123] - The Southeast segment saw a 14.2% decrease in homebuilding revenue for the three months ended March 31, 2025, totaling $70.5 million, due to a 12.3% decrease in closings[124] Market Conditions and Outlook - The company believes that excluding one-time gains from Adjusted EBITDA provides a better reflection of its core operations[108] - Future land and lot sales will depend on local market conditions and individual community performance[143] - The company's credit rating was reaffirmed as B+ by S&P in February 2025, with a negative outlook[172]

Financial Performance - Net income for the second quarter was $12.8 million, or $0.42 per diluted share, down 67.4% from $39.2 million, or $1.26 per diluted share, in the same quarter last year [2]. - Adjusted EBITDA decreased by 34.0% to $38.8 million, down $20.0 million compared to the prior year [3]. - Income from continuing operations, net of tax, fell to $15.9 million, a decrease of 73.9% from $60.9 million [20]. - Adjusted EBITDA decreased to $61.9 million, down 36.1% from $96.8 million [20]. - Net income for the three months ended March 31, 2025, was $12,778 thousand, compared to $39,171 thousand in the same period of 2024, a decrease of 67.4% [37]. - Adjusted EBITDA for the three months ended March 31, 2025, was $38,813 thousand, down from $58,776 thousand in Q1 2024, a decline of 34.0% [37]. Revenue and Orders - Homebuilding revenue increased by 3.2% to $556.0 million, driven by a 3.4% rise in home closings to 1,079 homes [6]. - Homebuilding revenue increased to $1,016.5 million, reflecting a 10.5% growth from $919.6 million [20]. - Total homebuilding revenue for the three months ended March 31, 2025, was $556,032 thousand, up from $538,636 thousand in the same period of 2024, representing an increase of 3.7% [33]. - New home orders decreased to 2,030, down 4.3% from 2,122 in the previous year [20]. - Total new orders, net of cancellations, decreased to 1,098 units in Q1 2025 from 1,299 units in Q1 2024, a decline of 15.5% [33]. Backlog and Cancellations - The backlog dollar value was $831.5 million, down 22.7% from $1,075.1 million a year ago, with an average selling price of homes in backlog at $544.9 thousand, up 3.7% [5]. - Backlog units decreased to 1,526, down 25.4% from 2,046 [22]. - Dollar value of backlog declined to $831.5 million, a decrease of 22.7% from $1,075.1 million [22]. - Cancellation rates increased to 16.7%, up 170 basis points from 15.0% [20]. - Net new orders fell by 15.5% to 1,098, with a cancellation rate of 16.9%, up from 12.2% in the prior year [4]. Costs and Expenses - Homebuilding gross margin was 15.1%, down 360 basis points year-over-year, while excluding impairments, it was 18.3%, down 340 basis points [7]. - Selling, general and administrative expenses as a percentage of total revenue increased to 12.0%, up 50 basis points from the previous year [8]. - Homebuilding gross profit for Q1 2025 was $84,132 thousand, down from $100,774 thousand in Q1 2024, a decline of 16.6% [35]. Assets and Capitalization - Total assets increased to $2,654,745 thousand as of March 31, 2025, compared to $2,591,527 thousand on September 30, 2024, reflecting a growth of 2.4% [32]. - Total debt as of March 31, 2025, was $1,082,231 thousand, an increase from $1,025,349 thousand as of September 30, 2024, reflecting a rise of 5.5% [32]. - The total stockholders' equity decreased slightly to $1,228,067 thousand as of March 31, 2025, from $1,232,111 thousand on September 30, 2024, a decrease of 0.3% [32]. - Total capitalization reached $2,310,298 thousand, an increase from $2,184,888 thousand year-over-year [39]. - Net debt increased to $997,149 thousand, up from $890,444 thousand in the previous year [39]. - Net debt to net capitalization ratio improved to 44.8% from 43.4% year-over-year [39]. - Cash and cash equivalents decreased to $85,082 thousand from $132,867 thousand [39]. - Total debt to total capitalization ratio remained stable at 46.8% [39]. - Net capitalization increased to $2,225,216 thousand from $2,052,021 thousand year-over-year [39]. Land and Development - The company controlled 28,290 lots, a 5.2% increase from 26,887 lots in the prior year [9]. - Land acquisition and development spending increased to $408.3 million, a rise of 3.0% from $396.5 million [20]. - The average selling price (ASP) in backlog increased to $544.9 thousand as of March 31, 2025, compared to $525.5 thousand in 2024, an increase of 3.9% [33].

Core Viewpoint - Beazer Homes (BZH) shares experienced a significant increase of 7.1% to $20.37, following a favorable policy outcome for the housing industry, particularly tariff exceptions for Canada and Mexico, which were deemed a major win for homebuilders [2][4]. Company Summary - Beazer Homes is expected to report quarterly earnings of $0.29 per share, reflecting a year-over-year decline of 77%. Revenue projections stand at $545.2 million, indicating a slight increase of 0.7% compared to the same quarter last year [2]. - The consensus EPS estimate for Beazer has remained unchanged over the last 30 days, suggesting that the stock's price movement may not sustain without trends in earnings estimate revisions [4]. Industry Summary - Homebuilding stocks, including Beazer Homes, surged due to positive policy developments, with the National Association of Home Builders highlighting the tariff exceptions as beneficial for the industry [2]. - PulteGroup (PHM), another company in the same industry, saw its stock rise by 3.6% to $101.24, although it has experienced a -9.7% return over the past month. PulteGroup's consensus EPS estimate remains unchanged at $2.48, representing a 13.6% decline from the previous year [4][5].

Group 1 - The biotech sector has seen significant interest in buy-write or covered call strategies, indicating potential trading opportunities in selected biotech stocks [1] - The home building industry is facing challenges due to tariffs on Canadian lumber and rising mortgage rates, which are currently averaging just under 7% [2] - A model portfolio featuring 12-20 high upside biotech stocks is being offered by an investing group, along with live discussions and weekly market commentary [2]

Core Viewpoint - Beazer Homes is experiencing significant challenges in the housing market in 2025, leading to a projected decline in earnings and a bearish outlook from analysts [1][7]. Financial Performance - Beazer Homes reported fiscal first quarter 2025 earnings of $0.10, missing the Zacks Consensus estimate by $0.21, which represents a 67.7% earnings miss [5]. - Revenue increased by 20.9% year-over-year to $460.4 million, driven by a 22.1% rise in home closings to 907 homes, despite a 1% decrease in average sales price to $507,600 [6]. - The adjusted gross margin fell to 18.2% from 22.9% the previous year, attributed to increased price concessions, closing cost incentives, and a higher share of lower-margin spec home closings [7]. Share Repurchase and Market Response - Beazer Homes announced an acceleration of its share repurchase program, with approximately $24.8 million remaining as of February 6, 2025, and has repurchased about $4.1 million of its shares at a weighted average price of $21.86 [2][3]. - The company's shares have declined by 27.6% over the last six months, reflecting market fears regarding the housing sector and tariff impacts [9]. Analyst Sentiment and Valuation - Analysts have become increasingly bearish on Beazer Homes, with the Zacks Consensus Estimate for the full year dropping from $4.44 to $3.49, a decline of 23% [8]. - Beazer Homes is currently considered undervalued, with a forward price-to-earnings (P/E) ratio of 6.2 and a PEG ratio of 0.3, indicating potential value and growth [11].

Financial Performance - Revenue for Q4 2024 was $468.95 million, up 21.2% YoY [1] - EPS was $0.10, compared to $0.70 in the year-ago quarter [1] - Revenue surpassed Zacks Consensus Estimate by 1.82% ($460.59 million) [1] - EPS missed consensus estimate by 67.74% ($0.31) [1] Key Metrics Analysis - Total home closings: 907 vs 890 estimated [4] - Average Closing Price: $507.60 vs $514.67 estimated [4] - New orders, net of cancellations: 932 vs 1,071 estimated [4] - Units in Backlog: 1,507 vs 1,663 estimated [4] - Average active community count: 161 vs 162 estimated [4] Revenue Breakdown - Homebuilding revenue: $460.42 million, up 20.9% YoY vs $458.08 million estimated [4] - Land sales and other revenue: $8.53 million, up 44.6% YoY vs $2.50 million estimated [4] Profit Analysis - Homebuilding gross profit: $69.98 million vs $72.52 million estimated [4] - Land sales and other gross profit: $2.10 million vs $1.03 million estimated [4] Stock Performance - Shares returned -1.9% over the past month vs Zacks S&P 500 composite's +1.2% change [3] - Current Zacks Rank: 3 (Hold) [3]

Beazer Homes USA, Inc. Q1 2025 Earnings Presentation 1 Disclaimers This presentation contains forward-looking statements about Beazer Homes USA, Inc. ("Beazer Homes") that only speak as of this date. Beazer Homes disclaims any obligation to update these statements. These forward-looking statements represent our good-faith estimates, expectations or beliefs concerning future events, and it is possible that the results described in this presentation will not be achieved. Forward-looking statements in this doc ...

Core Viewpoint - Beazer Homes reported quarterly earnings of $0.10 per share, missing the Zacks Consensus Estimate of $0.31 per share, and showing a significant decline from $0.70 per share a year ago, resulting in an earnings surprise of -67.74% [1] Financial Performance - Beazer posted revenues of $468.95 million for the quarter ended December 2024, surpassing the Zacks Consensus Estimate by 1.82%, and showing an increase from year-ago revenues of $386.82 million [2] - Over the last four quarters, the company has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] Stock Performance - Beazer shares have declined approximately 1.9% since the beginning of the year, contrasting with the S&P 500's gain of 2.7% [3] Future Outlook - The company's earnings outlook will be crucial for investors, including current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is $0.96 on revenues of $627.46 million, and for the current fiscal year, it is $4.44 on revenues of $2.75 billion [7] Industry Context - The Building Products - Home Builders industry, to which Beazer belongs, is currently ranked in the bottom 14% of over 250 Zacks industries, indicating potential challenges ahead [8]

Financial Performance - The total revenue for the quarter was $468.953 million, up from $386.818 million in the prior year, representing a growth of 21.2%[111]. - Net income for Q4 2024 was $3,130, a decrease of 85.6% from $21,728 in Q4 2023[113]. - Adjusted EBITDA for Q4 2024 was $23,044, down 39.4% from $38,018 in Q4 2023[113]. - Homebuilding revenue for Q4 2024 was $460,422, an increase of 20.9% from $380,919 in Q4 2023[122]. - Operating income decreased by $18.1 million to $2.1 million for the three months ended December 31, 2024, compared to $20.3 million in the prior year quarter[138]. Homebuilding Metrics - For the quarter ended December 31, 2024, the average active community count increased by 17.8% to 161 from 137 in the prior year quarter[107]. - Net new orders increased by 13.2% to 932 from 823 in the prior year quarter, despite a slight decline in sales pace to 1.9 orders per community per month[107]. - The backlog units decreased by 15.9% to 1,507 as of December 31, 2024, compared to 1,791 in 2023[121]. - The Average Selling Price (ASP) for homes closed was $507.6 thousand, down 1.0% from $512.7 thousand in the prior year quarter[107]. - Average Selling Price (ASP) in backlog increased by 4.0% to $541.5 thousand in 2024 from $520.8 thousand in 2023[121]. Cost and Margin Analysis - Homebuilding gross margin decreased to 15.2% from 19.9% in the prior year quarter, while gross margin excluding impairments was 18.2%, down from 22.9%[110]. - Homebuilding gross profit decreased by $6.0 million to $70.0 million for the three months ended December 31, 2024, compared to $75.9 million in the prior year quarter, with a gross margin decrease of 470 basis points to 15.2%[130]. - SG&A expenses as a percentage of total revenue improved to 14.0% from 14.3% in the prior year quarter, indicating better overhead cost management[110]. - SG&A expense increased by 19.3% compared to the prior year quarter, while SG&A as a percentage of total revenue improved by 30 basis points to 14.0%[138]. Investment and Development - The company invested $211.3 million in land acquisition and development, a 6.3% increase compared to $198.7 million in the same quarter last year[107]. - The company controlled 28,874 lots as of December 31, 2024, a 9.5% increase from 26,374 lots in the prior year[107]. - The company aims to reach more than 200 active communities by the end of fiscal 2026 and achieve 100% Zero Energy Ready home starts by the end of calendar year 2025[106]. Debt and Liquidity - Total debt increased to $1,071,290 as of December 31, 2024, up 9.9% from $974,644 in 2023[115]. - As of December 31, 2024, the liquidity position included $80.4 million in cash and cash equivalents and $255.0 million of remaining capacity under the Unsecured Facility[153]. - The company had $45.0 million in borrowings under the Unsecured Facility as of December 31, 2024, with a remaining borrowing capacity of $255.0 million[156]. - A one percent increase in interest rates on variable rate debt of approximately $76.9 million would increase interest expense by about $1.0 million over the next twelve months[171]. Segment Performance - The West segment saw a 24.5% increase in homebuilding revenue, driven by a 28.0% increase in closings[123]. - The East segment experienced a 51.3% increase in homebuilding revenue, attributed to a 47.8% increase in closings[124]. - The Southeast segment's homebuilding revenue decreased by 19.7%, primarily due to an 18.3% decrease in closings[125]. - The West segment's homebuilding gross profit increased by $2.5 million, while gross margin decreased to 18.3%, down from 21.7% in the prior year quarter[131]. - The East segment's homebuilding gross profit increased by $3.7 million, with gross margin decreasing to 15.1%, down from 17.7% in the prior year quarter[132]. - The Southeast segment's homebuilding gross profit decreased by $7.1 million, with gross margin decreasing to 16.1%, down from 22.4% in the prior year quarter[133]. Cash Flow - Net cash used in operating activities was $159.4 million for the three months ended December 31, 2024, primarily driven by an increase in inventory of $122.3 million[148]. - Net cash used in operating activities was $225.6 million for the three months ended December 31, 2023, primarily driven by an increase in inventory of $196.3 million[149]. - Net cash used in investing activities was $12.8 million for the three months ended December 31, 2023, mainly due to capital expenditures for model homes and information systems infrastructure[150]. - Net cash provided by financing activities was $41.9 million for the three months ended December 31, 2024, primarily from net borrowings[151]. Other Financial Information - Corporate and unallocated net expenses increased by $11.0 million from the prior year quarter, primarily due to higher G&A expenses and higher amortization of capitalized interest[142]. - Land sales and other revenue increased by $2.6 million to $8.5 million, with land sales and other gross profit increasing by $0.3 million to $2.1 million compared to the prior year quarter[135]. - Outstanding letters of credit and surety bonds totaled $37.1 million and $320.6 million, respectively, as of December 31, 2024[169]. - No share repurchases were made during the three months ended December 31, 2024, with $28.9 million remaining in the share repurchase program[162].